A good deal, but very bad politics

In support of Prime Minister Manmohan Singh

Readers of this blog will know that The Acorn has been overwhelmingly underimpressed with Dr Manmohan Singh’s prime ministership, and, on several occasions, called for his resignation. He has allowed his ‘unblemished’ reputation to mask the venality and criminality in his cabinet. His government has not only shown lack of initiative for further economic reforms, but seems keen to take India back to the times before the P V Narasimha Rao reforms of the 1990s. His government is an abysmal failure on national security—be it on the Pakistan, on home-grown jihadi groups, on Naxalites or in Assam. Yes, there are several reasons why Dr Manmohan Singh must step down.

But the US-India nuclear deal is not one of them.

Much of the opposition to the deal has been either ideological or legalistic. Hardliners have argued that nothing, nothing, must be allowed to come in the way of India’s development of more nuclear weapons. Now, nuclear weapons will remain pretty powerful guarantors of survival and security well into the conceivable future. But mere ownership of nuclear weapons without broad, comprehensive national power is counterproductive—a good example being our nuclear neighbour to the West. So it really is a question of to what extent India should pursue development of nuclear weapons given the costs.

That’s where the minimum credible deterrent comes in—it is, in other words, the smallest quantity of nuclear weapons necessary to ensure that India’s strategic adversaries take it seriously enough not to launch an attack. Much of the debate over the last two years has been over defining the minimum. Since the exact quantity and numbers are top secret, one has had to rely on commentators close to the security establishment for light. In order not jeopardise the ongoing negotiations with the United States, those in the know did not articulate their opinion too strongly. It was only after the recent agreement on the text of the 123 agreement that K Santhanam, a former member of the nuclear establishment, confirmed that India has enough fissile material and warheads to constitute the minimum credible deterrent.

Yet deterrence is not a static concept—it has to evolve with the changes in the strategic landscape as well as the arsenals of the other nuclear powers. Does the deal prevent India from increasing the stockpile of fissile material for new warheads? It doesn’t. More importantly, as The Acornhas argued, India can enhance its deterrence capacity by improving delivery systems.

But what if India has to conduct additional explosive tests to build a new generation of warheads: thermonuclear and low-yield weapons, for instance. Won’t the deal make it very difficult? Yes, but only marginally. India’s self-imposed unilateral moratorium on testing is to a large extent sanctimonious. In reality, the geopolitical and economic costs of testing unilaterally outweigh any benefits that might accrue to improving India’s deterrence posture. This calculation will change materially if India were to test in response to a Chinese, Pakistani or perhaps even an Iranian test. Or jointly with like-minded nuclear powers.

So while hardliners can certainly find fault with the deal for straying from the maximalist prescription, there is sufficient room for India to develop its nuclear capability to maintain the nuclear balance.

The legalistic opposition to the deal has centred around whether it affects India’s ‘legal right’ to conduct nuclear tests and the dispute resolution mechanism should the United States decide to terminate the agreement and recall the fuel and components it supplied.

Those who worry about the ‘right’ to test miss an important aspect of a great power—that international laws are subsidiary to its national interests. As the Indian Expressput it in a recent editorial, “although agreements between nations do codify a particular understanding at a given point in time, future interpretation and action by states are based on cold calculations of interests”. The ‘legal right’ to test is a red herring.

But what if those perfidious Americans cut off supply of nuclear fuel to India? Well, unless Indian diplomacy goes to sleep after concluding the deal with America, it is clear that similar supply arrangements will be made with Russia, France and other countries. An astute management of relations with the countries in the supplier cartel can ensure that not only will fuel supplies not dry up should Washington pull the plug, but also address the issue of American ‘pressure’ on Indian foreign policy. Nuclear fuel purchase relationships with these countries offer India a strategic opening to engage these countries in comprehensive political and economic relationships. Critics of the UPA’s handling of nuclear deal would have been on a firmer footing if they had asked whether this government has the strategy and the political will to accomplish this.

In condemning the compromise agreement concluded in late July, the BJP has added to its many failings after it lost the 2004 elections. By opposing an agreement it “would have given its right arm for” if it were in power, it has damaged its credentials as a party which takes national security seriously. By making common cause with the anti-national Left, it has allowed the communal socialist Congress party to claim the middle ground. Most importantly it has shown that it is out of sync with the national mood. Most Indians are unlikely to be familiar with the nitty-gritties of deterrence, reprocessing and reactor safeguards. But they—and most of all the BJP’s own supporters—know that India and the United States find themselves on the same side.

The BJP will find itself having to explain to Indian voters why it joined the Left, China and Pakistan in opposing this deal. [Update: Especially given this]

44 thoughts on “A good deal, but very bad politics”

I believe Indian diplomacy has not been particularly awake in allowing huge quantities of spent fuel from Tarapur 1 and Tarapur 2 to accumulate outside the reactor adding to potential radiation-release problems should an untoward incident take place as it did in Japan recently.

I would like to submit that this deal should be opposed because it will come in the way of India’s development of high technology. It is not a mere coincidence that whatever progress India has achieved in the nuclear electricity field has been during the time when the “technology control regime” was at its fiercest. As a loving parent, one would attempt to wean away a child, learning to walk, from his/her walker after (s)he gets some dexterity in that activity.

Contrary to what many would like the general public to believe, India still has a lot of distance to cover even in PHWR technology if it wants to trade in nuclear technology with advanced countries on an equal footing (technology-wise). The situation could be worse in the case of Fast Reactors. In critical fields, India’s strategy should be to import only those components that can be made in India but are cheaper to get from abroad; strive as far as possible to avoid importing just because the item cannot be currently made in India.

Exaggerated statistical projections of the quantum of electricity requirments in the near and far future, and actions taken on the basis of those data, ultimately would tend to be counter-productive. Pace of development can only be enhanced with internal strengths; perennially seeking external help is not the way.

I would like to submit that this deal should be opposed because it will come in the way of Indiaâ€™s development of high technology.

And I think it is necessary for precisely the same reason—India’s own technological base will benefit from the deal. We could have spent decades perfecting the Ambassador; but within a decade of liberalisation Tata was producing the Indica. I don’t think employees and management of Hindustan Motors would have agreed (in mid-1990s) that deregulating the automobile industry would be good for the consumer as well as for the domestic industry itself.

I agree with you that India’s state-owned nuclear corporations must invest in areas where they can be globally competitive. But this can be done while opening the plain-vanilla segment to international competition.

A+, Nitin! As I have come to rationally expect from the Acorn, you have written a careful and well thought through analysis.

I have one misgiving about the deal:

… should the United States decide to terminate the agreement and recall the fuel and components it supplied.

This right to recall is provided to the President of the United States under the Atomic Energy Act of 1954, and is at the core of the Hyde Act. Is the right to recall, a right to be compensated (in cash or kind) adequately for the fuel and the components supplied, or does it imply that India merely gets the use rights on the components (fuel would have been spent anyway) and not absolute property rights? This may seem like a pedantic question, but I worry because the US has (as any other self-respecting nation would too) in the past gone to war with nations to reclaim what it deemed as its property. Has there been any clarification from either side? Thanks.

Indeed, the biggest open question is what happens if either party wants to terminate the deal. There seems to be an understanding that the should the US recall what it supplied, then it will have to compensate India accordingly. All we know is that it will involve “consultations”—essentially more negotiations. Allowing this to be open ended is likely to have been necessary to make the problem tractable.

In the worst case, the US could slap odious sanctions, place India in the doghouse etc; but it is unlikely to resort to use military force.

I am not exactly sure what BJP wants. May be opposition for the sake of opposition that all Indian political parties follow because these type of issues don’t matter when it comes to elections and if things go wrong, it can always fall back on an I told you so.

Here is my understanding of the Article 14, which deals with
termination of the agreement:

Article 14 (1): It is clear that the agreement can not be terminated
in any way other than a 1 year notice. 14 (2) and 14 (3) add further
conditions for termination. These could make the termination an affair
longer than 1 year, but not less under any circumstances. 14 (2) makes
it clear that the “circumstances” like “changed security environment”
or “response to similar actions by other States” *must* be taken into
account before termination takes place.

Article 14 (4): Only *after* the termination of the agreement can the
parties exercise the right to recall material, equipment, components
etc. Not before the termination. Even if the notice invoking the right
to recall stuff is delivered along with the notice for termination,
the minimum duration is still 1 year, no less.

Article 14 (5): It makes clear that exercising the right of return
would have “profound implications” for bilateral relations. It puts
further safeguards in place for exercising this right – consideration
for uninterrupted operation of civilian nuclear reactors, and
potential negative consequences for on-going contracts and projects
(billions of dollars, basically). 14 (6) states clearly that
compensation at “fair market value” would have to be paid in case this
right is invoked. 14 (7) and 14 (8) are just technical clauses about
the safety procedures etc. and 14 (8) refers to Article 5 (6) which
contains the US obligations and states that the purpose of Article 14
(all clauses) is not to derogate from the rights of parties contained
in 5 (6).

Article 14 (9): It refers to Article 6 (iii) about the dedicated
reprocessing facility and states that it may be suspended by either
party in “exceptional circumstances” (as defined by the parties)
*after* consultations have been held.

Overall, it is pretty clear that while the parties do not trust each
other to the fullest extent (given the baggage of history, they really
can’t) they realize the importance of this agreement and have put a
lot of emphasis on making termination difficult.

The only thing that would be liable for almost immediate suspension is
the dedicated reprocessing facility. As you may notice, this is a
superficial clause because there is no way for anyone to make India
stop the reprocessing – it will be an Indian facility operated by
India on Indian soil. The fuel supply may be suspended under the same
clause, but the stockpile (only the part that came from the US) need
not be returned for 1 whole year (during which period the reprocessing
would go ahead of course).

If you read between the lines, it is clear that an unprovoked test is
not considered to be a real possibility by both countries.

A likely scenario, that might play out, is this: US tests, China tests
in response (Russia might also test) and then India tests (to be
followed by Pakistan). You can reverse US and China in this scenario.
In this scenario, I expect the US to put pressure on India to not
test. But the thing to keep in mind is that this scenario is not
affected by the deal. This scenario would play out in this regardless
of whether we have a deal or not.

[…]I expect the US to put pressure on India to not test…….This scenario would play out in this regardless of whether we have a deal or not.

Agreed, but with the deal on, US will have a clear picture of how to apply pressure. If there are enough clauses to shield us from the pressure, then there is no issue with the deal. It would be good if India Govt explains (with all possible scenarios which she thinks can happen) to its citizens about the deal in detail.

“In reality, the geopolitical and economic costs of testing unilaterally outweigh any benefits that might accrue to improving Indiaâ€™s deterrence posture. This calculation will change materially if India were to test in response to a Chinese, Pakistani or perhaps even an Iranian test. Or jointly with like-minded nuclear powers.”

But shouldn’t tests be conducted in response to development requirement. I do find test in response of test a bit cowboyish.

“Those who worry about the â€˜rightâ€™ to test miss an important aspect of a great powerâ€”that international laws are subsidiary to its national interests. As the Indian Express put it in a recent editorial, â€œalthough agreements between nations do codify a particular understanding at a given point in time, future interpretation and action by states are based on cold calculations of interestsâ€. The â€˜legal rightâ€™ to test is a red herring.”

To me, the “deal” is not the natural or even stable state of things. “No Deal” is the natural state.

The contributions of NRIs towards furthering this deal is worrisome to say the least. To me they are citizens of a foreign country and I am not convinced that Indias interests will be uppermost in their mind, compared to issues like family based immigration, more worker visas, or even an empowered Indian lobby in the Capitol.

Having said that, the mere fact that NRIs have lobbied hard does not reflect on the merits of the deal per se.

We ought to first have a discussion on the merits of moving from a stable state (of no deal) to a possibly unstable (I hope not) of *deal*.

India needs 50,000 MW of power generation in the next 20 years. Okay plus points for that. American made nuclear power plants running on American fuel make a cute targets for terrorists. Minus points for that. Indian reactors under surveillance , whereas Pakistanis can do whatever they want. (please dont tell me that the Americans once they are here do not have the means to find out the minute details of the so-called research reactors).

I am looking for an informed discussion on the merits along the above lines. Where can I find that ?

Regardless of whether it is a good deal or bad deal, the government and the prime minister do seem to be misleading the nation (and parliament) on its implications.

—

N-deal will scrap if India goes for atomic test

PTI | Washington

The United States has made it clear that the civilian nuclear deal with India will be “terminated” in the event of an atomic test by New Delhi.

“The proposed 123 Agreement has provisions in it that in an event of a nuclear test by India, then all nuclear cooperation is terminated,” US State Department Spokesman Sean McCormack said on Tuesday.

The spokesman also said there is “provision for return of all materials, including reprocessed material covered by the Agreement.”

India has been maintaining that the 123 Agreement is silent on the issue of testing. Prime Minister Manmohan Singh told Parliament on Monday that the Agreement to operationalise the civilian nuclear deal would not affect India’s right to undertake future nuclear tests.

I’m disappointed at the last two paragraphs in your otherwise well written post.

1. shud the BJP praise the deal simply because the Indian middle class doesn’t read the nitty gritty of the deal and is happy that India and US are bhai-bhais now? what appalling non-sense.

2. lets decipher what the BJP has done.

a. it has been very much involved in the negotiations. (and Manmohan also needs to be praised for keeping them in the loop.) the questions is will the BJP have accepted this deal without pushing a little further to get more out of it? are Manmohan Singh and Bush imposing unnecessary time limits on concluding this deal which might be detrimental to Indian interests?
b. Yashwant Sinha called Singh’s statement ‘a bunch of untruths, half-truths and white lies’. is it not true that Singh has been dishing out half-truths about the Hyde act and has not been forthcoming in explaining the state of the deal if India wants to voluntarily conduct a nuclear test? even if he expects the ‘one year explanation/withdrawal’ phase is sufficient, why shud all of us share his optimism?
c. advani has agreed that there is no such thing called ratification. he has sought ‘renegotiation’. even if we don’t renegotiate this, should not the government keep the opposition’s view in mind when it works with the US and the NSG to set the ball rolling.
d. BJP has demanded a debate under rule 184. whats wrong with that. why shud BJP bail this government out if it by itself cannot get the numbers? is it BJP’s job to help Manmohan kiss and make up with Karat? for heaven’s sake this is just a resolution not a money bill. hasn’t BJP expressed its willingness to support several economic bills on which Manmohan is pussy-footing fearing the left. pension reforms for instance?
e. even if we take your silly logic that BJP is hurting itself by ‘opposing’ the agreement, isn’t that what we expect from our political parties? shud they play to the gallery or stand up for what they believe?

The Tamasha news culture (read CNN-IBN!) seems to have corrupted all our minds. We have just seen democracy at its best.

1. Govt does a decent job in coming up with a deal and is courteous enough to keep the principal opposition party in the loop.
2. The principal opposition party gives all its inputs when asked for behind the scene and also tries to educate the public on the weak points in the deal.
3. There is a fringe left which brings in the broader picture (pro or anti US debate) while giving reasonable assurance that its not out to destabilize the govt.

I wish we all appreciate this ‘right way’ of doing things in India instead of bringing petty political considerations into the debate.

Exactly. Not standing up (in Parliament, where it counts) for what they believe is exactly the problem with the post-2004 BJP. Perhaps you have facts to support your case that they ‘stand up’ for what they believe. Or have they only ‘walked out’ for what they believe?

Bad politics or not, the government seems to be spinning different stories everytime. Just when they said India could conduct future tests, there are news reports that say US will terminate the deal. Lots of misinformation if you ask me.

Even I would like to see them debate than shout in parliament. Advani had said they would this time. Walking out, shouting are unfortunately some of the ways to get the message across. We need not be too critical of that unless they stand up for what they believe either inside or outside the house.

btw there are lots of things bad about the BJP. their stand on the nuclear deal is not one of them.

“To support this insidious deal is nothing short of high treason, an act utterly destructive of Indiaâ€™s national interest.”

That’s a tall claim to make, especially when it is based on someone else’s politically-motivated analysis.

There is not a single objection (from the Indian side) to the deal that can not be answered by a reading of the 123 text and application of some common sense.

At the heart of objections to the deal is this simple question:

Q. Do we have the right to test?

A. We do. There is nothing in the 123 text that says that India will not test. The 123 text says that the US will have the right to seek return of whatever it supplied (it doesn’t say “in the event of a test”, but it is understood). So what? The deal will be operationalized only after we have an Agreement with IAEA and a waiver from NSG. This means that there would be other suppliers (notably France and Russia besides scores of others). How the heck is Hyde Act going to stop THEM from supplying stuff to India? In fact, if the US steps aside, it would create an even larger market opportunity for other countries. I hope you realize that we are talking about tens (a few years down the line, hundreds) of billions of dollars here. Russia is already committed to supplying 4 reactors to India as soon as NSG gives a waiver to India (and they want to supply more). This is public knowledge, BTW (read some news items from the time of Putin’s visit to India in January this year).

Nukes gave a sense on security in the Cold War, when nothing mattered much except a clash of ideologies. This is not true anymore. Security is attained today by creating economic interdependencies. That is what rules out war in today’s world between countries like USA and China, or indeed, USA and Russia. Yes, there would still be posturing.. but that is all there is to it and that too will never go to the extent of Cuban Missile Crisis. Failure to understand this simple thing indicates a huge lack of intellect.

India and USA have a trust deficit because of our historical baggage. With that in mind, how the heck does anyone expect the USA to provide all-out support to India, especially in matters Nuclear? It is obvious that the deal is nothing except a step in a much stronger relationship. This is a logical follow-up to what Narsimha Rao started and Vajpayeed continued. A few years down the line, when this limited deal is operational, there would be another deal, and then another. This is how you build relationships up.

“At stake is nothing less than the complete annihilation of Indiaâ€™s capacity to defend itself from the Chinese and the imposition of nuclear slavery by the Americans.”

And how exactly are the Americans going to achieve this? And how exactly does this serve American interests?

If there is anything at stake, it is the freeing up of our minds from colonial and cold war phobias. This perpetual fear that others are out to get us.. that they are all immoral while we are paragons of virtue.. this mistaken belief that we are innocent and naive while the others are smart and cunning.. this HAS to go.

There is only one opposition to the deal that makes sense, but it is not from the Indian side – it is from the Nuclear Non-proliferation lobby. And it is the simple mathematical calculation that India would be able to use her domestic nuclear fuel for the weapons programme while running the civilian reactors on foreign supplies. If you read the deal (it’s plain English, you should try it instead of swallowing political propaganda), you can see that this is indeed true. And the only reason that India is being allowed to get away with this is our clean record on non-proliferation and the understanding that India has no interest in deploying nuclear weapons except in retaliation against a possible nuclear strike from Pakistan (China would never do it, it is not stupid) in the event that its nukes fall in the wrong hands.

And if you (being an Indian, along with being a Gujjubhai) have any objection to THAT, then I humbly suggest that it may be you, not Nitin, who is committing high treason and utterly destroying India’s national interest.

Your views have provided much clarity. Its completely bizarre to see Mr. Advani hand in glove with karat and co., the official chinese clients operating in India.

Either Mr. Advani is taking advice from people who have shady links with communists – or age has made him a full time resident of cuckooland. Even Mr. Shourie, the best of men, refuses to give it a rest.

I think once Kakodkar and a majority of nuclear community gave their consent to the deal, along with US assurances that India can test in reply to paki or chinese tests, we should all see this as a good national achievement and move on.

Let the chinese clients in India stew in their own petty hatreds and propaganda. They are eventually headed towards the garbage bins of history.

I have nothing to add. Mr Shourie writes well, and does a nice job running through the text and speeches. But the gist of his conclusions have been addressed in this post. Also, do note that whether or not Dr Manmohan Singh’s government did a good job in ‘selling’ this to the nation is quite a different matter from whether or not the deal damages the national interest.

At stake is nothing less than the complete annihilation of Indiaâ€™s capacity to defend itself from the Chinese and the imposition of nuclear slavery by the Americans.

Surely you exaggerate. But if you really believe this literally, then I’ll just say that I don’t share your lack of confidence in India’s strengths.

You are making a passionate argument against the deal, based as I am sure, in your belief that it is against the national interest, although I suspect that your conclusion is a result of overly crediting the Americans and underestimating the Indians. You are entitled to your opinions. But it should be possible for right-thinking people to disagree on matters without belittling those you disagree with or by raising those you agree with onto a pedestal.

To me, itâ€™s obvious that the reason why India negotiated such a bad deal is because I donâ€™t think any of Indian negotiators deals with Americans day in and day out in a competitive fashion.

I recommend Strobe Talbott’s excellent little book: Engaging India. But I fear you’ll say “Of course, the Americans are not stupid enough not to seduce Indian officials with praise…” 🙂

Did you even read the articles from Shourie? To insinuate that a person of proven integrity and fierce intellect such as Shourie is politically motivated is a low-level of ad hominem attack that I would expect only Con-gressis and secularists to stoop down to. You have basically just regurgitated the governmentâ€™s talking points without reading the text itself or understanding how the Americans have crafted an elaborate framework of laws and strategies to exert power and control over India, of which the 123 agreement is only one cog in the wheel.

Suffice it to say that all of your counter-arguments are based on wishful thinking or lack of understanding the sophisticated game that the Americans have played.

Let me dispense with a few of your counter-arguments:

â€œQ. Do we have the right to test?
A. We do. There is nothing in the 123 text that says that India will not test.â€
Of course, there is nothing to explicitly bar India from testing : the Americans are not stupid enough to put such a political non-starter in writing in such a deal. I am amazed at the stupid MSM tom-tomming this as if itâ€™s a great achievement! Of course, the real objective of Americans is to create influence on Indiaâ€™s making that decision. The theoretical â€œright to testâ€ is useless in the face of the grave consequences of actually testing that India is signing on to. Americans have basically put themselves in a controlling situation whereby they hold a loaded gun to Indiaâ€™s head which says that â€œwell, you have a right to test, but if you go ahead, say good bye to 10-20 years of investments in your nuclear industry and the electricity generationâ€. Do you even understand the term leverage? If yes, do you see how US is creating leverage over India?
â€œThis means that there would be other suppliers (notably France and Russia besides scores of others). How the heck is Hyde Act going to stop THEM from supplying stuff to India?â€

You think the Americans are so stupid that they will allow India to game the 123 Actâ€™s restrictions by creating competition among suppliers? For one, the Hyde Act explicitly mentions that the US must pro-actively work to prevent this situation from arising. I must ask you again if you even read Shourieâ€™s analysis of the relevant clauses in the 123 Agreement. But since you donâ€™t even trust Shourie, let me quote you the summary of Section 103 of the Hyde Act:

â€œStates as U.S. policy the following: (1) to end the production by India and Pakistan of fissile materials for nuclear weapons and other nuclear explosive devices; (2) to achieve the government of Indiaâ€™s cooperation in the full range of international nonproliferation regimes and activities; (3) to ensure Indiaâ€™s compliance with arms control agreements and ensure that any safeguards agreement or Additional Protocol thereto to which India is a party with the International Atomic Energy Agency (IAEA) can reliably safeguard any export or reexport to India of any nuclear materials and equipment; (4) to meet specified requirements of the Atomic Energy Act of 1954 (AEA); (5) to act in a manner consistent with the Guidelines for Nuclear Transfers and the Guidelines for Transfers of Nuclear-Related Dual-Use Equipment, Materials, Software and Related Technology developed by the multilateral Nuclear Suppliers Group (NSG); (6) to work with NSG members to further restrict the transfers of such equipment and technologies; (7) to maintain international compliance with NPT; and (8) to ensure that exports of nuclear fuel to India do not contribute to increases in Indiaâ€™s production of fissile material for non-civilian purposes.â€

I assume you can read whatâ€™s written in plain English – the US policy is to restrict nuclear transfers through the NSG. In fact, this is even more horrible : not only is India entering into restrictions imposed by the US, it is also creating the situation whereby the US can legally influence all other members of the NSG to impose the same set of restrictions!! If this is not a Trojan Horse, then I donâ€™t know what is. You can be damnâ€™ sure that in the next stage of negotiations with the NSG, the US will wave the Hyde Act in Indiaâ€™s face and get the NSG as a whole to impose the same set of restrictions on trading with India. Already, Australia has warned that they will stop supply of Uranium if India tests.

And to think that Russia and France will break NSG rules to trade with India is just a foolish pipe dream. This is a naive understanding at best and betrays a lack of understanding of cartel behaviour. The incentive to cheat in a cartel can only arise if the gains from cheating are more than the potential losses of breaking ranks. Russia and France have much more at stake in ensuring that the worldwide Uranium market worth hundreds of billions of dollars continues to work smoothly and that they can continue to earn their fat cartel monopoly margins than trying to chase the small Indian market. Donâ€™t you think that other powerful members of the NSG such as US, Canada and Australia will retaliate against France and Russia if they saw those two attempting to break ranks? Study OPEC, my friend : even sworn enemies like Iran and Saudi Arabia choose to work together (a little cheating here and there notwithstanding) for controlling the worldwide market because there is way too much money involved. Even the worldâ€™s largest oil consumer US is unable to meaningfully influence the oil producers cartel even though it is best friends and protectors with the the most powerful member of the cartel, Saudi Arabia. Do you think that one of worldâ€™s smallest potential customer of Uranium India will be able to influence and engineer a break in the ranks of NSG?

â€œAnd it is the simple mathematical calculation that India would be able to use her domestic nuclear fuel for the weapons programme while running the civilian reactors on foreign supplies. If you read the deal (itâ€™s plain English, you should try it instead of swallowing political propaganda), you can see that this is indeed true.â€

Wrong again, my friend. Read the aforementioned summary of the US policy in the Hyde Act which I will quote again for your benefit :

â€œ8) to ensure that exports of nuclear fuel to India do not contribute to increases in Indiaâ€™s production of fissile material for non-civilian purposesâ€

Lest you think that this is an empty rhetoric, this is backed by a rigorous annual certification process in which the President of the US (POTUS) must satisfy the Congress that its objectives are being met. The onus will be on India to satisfy the POTUS that it is complying with the requirements of the Hyde Act because, guess what, the 123 Agreement mentions that the US will be governed by its domestic laws. This requirement creates further leverage on India.

Security is attained today by creating economic interdependencies.â€

You got that one right. However, by the same token, insecurity is created by one-sided dependence. In this case, where do you see interdependence? True interdependence in international relations takes hundreds of billions of dollars, my friend – not just a few or even tens of billions. True interdependence is between US and China where China depends upon US imports to keep millions employed and US depends upon China to keep the dollar stable due to the close to a trillion dollars in cash held by the Chinese. The proof of this interdependence shows up when the Treasury Secretary of the US Paulson actually lobbies the US Senators like Charles Schumer to prevent them from enacting laws that would impose punitive tariffs on Chinese imports!

See this

Here, on the other hand, India is creating one-sided dependency. India will become dependent upon the sole benevolence of the US to get fuel, use fuel, hope that it wonâ€™t be repossessed, and put may be 50,000 MW or so of Indiaâ€™s electricity generation at USâ€™s mercy which is, say, worth at most $50 billion including the future value of fuel supplies. On the other hand, what is the US dependency? Not a whole heck of a lot : US companies will get paid when they supply equipment and uranium to India. If the US wants to repossess that stuff, the depreciated book value of those assets and spent fuel will be at most 20-30% of the original investment which is, say $10 billion. Remember that US companies have already got paid, so the repossession cost will solely be born by the US government. Do you think that a government whose annual budget is in trillions of dollars will care about a hit of $10 billion? Thatâ€™s just the rounding error in second decimal point!

So, do you see the hugely asymmetric nature of the dependency? For $10 billion, US is getting itself an option to control and potentially disrupt a huge part of the Indian electricity grid, which it could use to destabilize the Indian economy if it wanted. It doesnâ€™t even actually have to do it, just a few threats in secretive back-rooms about potentially adverse effect on the Indian power grid will be enough to persuade any future government from doing anything that Americans donâ€™t like whether itâ€™s our relations with Iran or nuclear testing or whatever. That, my friend, is one hell of a sophisticated economic war strategy.

â€œIf there is anything at stake, it is the freeing up of our minds from colonial and cold war phobias. This perpetual fear that others are out to get us.â€

My favourite quote of all time : just because you are not paranoid does not mean that they are not out to get you. Stop being naive. Stop being foolish. Stop seeing things through the lens of friendship, enmity etc : understand interests and motivations. The US has a commercial interest in selling stuff to India and making money, but it has an even larger objective of remaining the sole superpower. Understanding that motivation is key to analyzing US behavior and its motivations behind signing this deal.

Basically, the deal is good for the US because it makes money for US companies, and gives it a stick to beat India with if India wants to do anything that the US does not like, and clips Indiaâ€™s wings thereby preventing any potential challenge to USâ€™s global power in the future.

International relationships are a complex web of creating and exercising leverage. Different fora bring different interests together. Nations can work together when it suits them but also screw each other over when that is in their interests. US is neither friend nor foe and India should neither be fearful of Americans due to cold war baggage nor naively euphoric about the brave new world of strategic partnership. Strategic partnership, democratic alliance etc are just empty marketing slogans. Just ask yourself this : if the US were really serious about strategic partnership with India, why did it not give a better 123 deal to India than China?

To me, itâ€™s obvious that the reason why India negotiated such a bad deal is because I donâ€™t think any of Indian negotiators deals with Americans day in and day out in a competitive fashion. I do business with Americans and I see the same behavior in every deal I have ever negotiated with them. They use the same strategies and tactics to advance their interests and extract profit in business, as they have used in negotiating this deal. Start with flattery, paint a rosy picture, the CEO pretends to really love India and makes unprecedented big concessions to your company compared to your competitors, and then the lawyers come out with a fully-loaded one sided agreement. The CEO and the lawyers play the good cop-bad cop routine, the CEO keeps telling you that he is trying to tell his lawyers to make the deal better for you, and then finally tries to sell you the same deal with a few watered down provisions but essentially still loaded in their favor. You play this game a few times and learn at your own cost. Of course, now I take pleasure in playing the same game with them and screwing them over. But I have hardly come across Indians – even techies who have worked in the US for many years but stuck to the engineering side – who have a real understanding of how the American mind works. Fundamentally, the American mind is absolutely obsessed with looking out for No 1 – ensuring the supremacy of the individual or his firm or America as country by means of guns, lawyers and destruction of competition. On the other hand, Indiaâ€™s lead negotiator had this to say:

â€œDid we have lawyers?
No, our country is not litigious like that. We donâ€™t have prenuptial agreements before one gets married here!â€

Tell us more about these mysterious “Americans” of yours. How do they look? What do they eat? What do they wear? What language do they speak? I have never even seen one, leave alone negotiate with such mysterious creatures.

Reading your comment, I just found out that people like Vajpayee and Shourie, who formed the government only once (essentially, though it was sworn in 3 times) had suddenly acquired the experience of dealing with “Americans” and laid the foundations of NSSP (whose direct result is the proposed Nuke deal).. while people like Manmohan Singh who had worked in IMF, been the Governor of RBI, and been the Finance Minister for a full term (apart from his other international experiences) along with his team of experienced bureaucrats, technocrats and diplomats have failed so disastrously that he has compromised our national interest for all times to come.

I guess Vajpayee and Shourie were probably in secret consultations with you before dealing with these mysterious “Americans”. Wow!

Clearly, I have a lot to learn from you.

Already, you have given us such a tremendous insight into the minds of these “Americans”:

“Fundamentally, the American mind is absolutely obsessed with looking out for No 1 – ensuring the supremacy of the individual or his firm or America as country by means of guns, lawyers and destruction of competition.”

Wow! They must really be stupid. I guess there is still some hope for India, where we have people like you. My only humble request to you is to contest the upcoming Lok Sabha elections (they are upcoming, aren’t they?) on BJP ticket and aim for the PM’s seat.

I hope that the readers of this blog would realize that the arguments being made by “Gujjubhai” and several others are exactly the same kind of arguments with which socialism was forced on us several decades ago – the fear of outsiders and the terrifying lack of confidence in our own abilities.

When we give in to such arguments, they become self-fulfilling prophesies; if you act on the belief that the Americans will be able to cheat you no matter what you do, then be rest assured that they would.

It is possible to forgive our insecurities of our early years when we had just come out of a long colonial rule, but not now. Not again.

â€œYou are making a passionate argument against the deal, based as I am sure, in your belief that it is against the national interest, although I suspect that your conclusion is a result of overly crediting the Americans and underestimating the Indians.â€

My argument is anything but passionate. Itâ€™s a dispassionate and objective analysis of what the Americans have stated as their policy, the usage of their tools to achieve their policy goals and a deep understanding of the American mind based on many decades of dealing with them in competing for power and money – and succeeding, if I may say so myself. It is based on literally what they have codified in their laws and having a strong historical context on their behavior. It is exactly what they have said what they want to do.

Indian analysts, on the other hand, are writing stuff based on naive optimism. They are swallowing the American marketing hook line and sinker. There is a reason why Americans are the best marketers in the world – hell, they invented it. However, to separate the truth from reality, you must see their actions.

We are talking about a country that sent its Secretary of State to sell a pack of lies to the United Nations in broad daylight and then it invented fake reasons to invade a country and kill 500,000 innocent civilians. They have zero moral compunction in the naked pursuit of their national interest. Donâ€™t think for a moment that they will shy away from exerting power over India when needed. India is dealing with the most ruthless people on the planet today who are determined to remain the most powerful country for as long as they can. My point is not that they are evil : my point is that India should be just as ruthless in protecting its interests. This agreement falls far short of that requirement.

I have, in fact, read Engaging India : it sits prominently in my vast collection of books on the US history, diplomacy and international relations. I have studied this stuff for decades because thatâ€™s what I need to succeed in competing against them. My final result is as objective as it can be : it is measured in the money I have extracted from them by outwitting them. Business is just another form of war and Iâ€™ve got enough battle scars from the Americans to really learn how to beat them. Unfortunately, the naive Indian negotiators donâ€™t know any of that. They have no clue about economic warfare – a game that Americans have been playing forever and become extremely sophisticated in.

Differentiate the actions from the hyperbole. See what laws they want you to be bound to. See what conditions they are imposing upon you. Understand why. Measure which side gets how much in terms of money and power. The deal gives too much power to the Americans and takes away too much from India – for a payoff thatâ€™s just not good enough. The reality is that the leverage over Indiaâ€™s energy industry is the most potent weapon Americans have created to control India. And, they can keep a smiling face by employing plausible deniability : just a few well-chosen leaks about the contemplation of cutting off uranium supply to India in the financial press will be enough to send the Indian stock market tumbling and the FDI to dry up. Why are Indians being so stupid as to hand over the detonator of an economic nuclear bomb to the Americans?

Many years ago, Teddy Roosevelt said that he believed in â€œspeaking softly and carrying a big stickâ€. Thatâ€™s why I am trained to look for the big stick behind the smiling faces and soft speaking. India will do well to learn that lesson too.

B.O.K, those are your answers to Gujjubhai’s excellent take on the other side of the equation? Gujjubhai clearly answered your question as to how US will block India’s deal with other NSG countries. And you have nothing to say but platitudes? Who do you think started NPT and NSG and why? There was only one target for NPT.

It’s nice to see you have so much confidence in Manmohan. If he was such an ace diplomat and a chalaki, he would have tackled his communists minions long time ago.

The only thing Gujjubhai is probably overlooking is the state of India a decade or two decades from now. I think India will have a lot more strategic leverage, bigger economy, and more involved in the world, say, when compared to now or was in 1975, to break down any US road blocks. The old post-parliament attack operation parakram-linked sanctions weapon will not work on India for too long. And India and US will be lot more intertwined in the future. US clearly could not give a better deal to India than China because, for historic reason, mostly due to India’s making, China is a recognized as nuclear power (built primarily by US) and we are not. But still there is good but brief article in IE (on Friday, I think) about how India’s deal is in someways better than China’s nuclear deal with US.

It’s not about colonial phobia – I think by and large the country is over it, except may be the communists – who actually liked colonialism and opposed freedom. You should seriously consider reading the “confessions of a hit man” book that Gujjubhai recommends – it gives the differences between rhetoric that US and it’s media feeds the world about itself – that fair-playing, enlightened country that everyone seems to lap it up easily, and the policies and coercions of the US establishment to get it’s way. Gujjubhai’s business example is right on target – but should one expect anything less?

The passion shows, whatever you might believe. That’s fine. But your arguments would be far more credible if you justified them with arguments other than impressing us with your experience and reading, and asking us to accept these as bases for accepting your conclusions. So let’s not have any more of this “act like an adult”, “educate yourself” type of statements thrown about.

(The rules of business and the rules of international relations are different. So the lessons from the world of business don’t directly translate to the ‘rules’ of international relations. The international system is an anarchy, and might is right. The corporate world operates under several layers of national and international laws and regulations. It’s a profound difference.)

This blog is of a Realist persuasion. So I agreed with the content (not the tone) of your injunction:

They have zero moral compunction in the naked pursuit of their national interest. Donâ€™t think for a moment that they will shy away from exerting power over India when needed.

Can’t agree with you more. I’ll just say that two can play this game. Indeed, that’s the entire point of all this—only small powers argue about “rights” and “sovereignty”. Great powers don’t bother about these niceties.

So when I see you paranoid (as you admit yourself) due to awe, I think you miss the point. Perhaps you find it hard to believe that India can actually negotiate with the greatest power on earth today. Yet, as you say yourself, in the context of your business experience, you’ve figured out their ways and can now pay them in their own coin. Unless you think that no one else can be as smart or smarter than you (a statistical impossibility) then what makes you think that the Indian foreign policy establishment hasn’t figured this out?

Another Gujjubhai once said that “be the change you wish to see”. While the growth of Indian power is palpable to others, the final frontier is in our minds. If we don’t believe we are a major power, strong enough to look after our interests, then we will never be one.

In the Realist interpretation, there are no rules binding nations. There is only power. The weak spend a lot of time arguing for a ‘rules-bound’ international community. The powerful do what they want, whatever they can get away with.

Tell us more about these mysterious â€œAmericansâ€ of yours. How do they look? What do they eat? What do they wear? What language do they speak? I have never even seen one, leave alone negotiate with such mysterious creatures.

Ah, the good old ad hominem attack on me personally with a childlike attempt at indulging in personal ridicule instead of my point-by-point rebuttal of everything that you had said: well done, BOK. Now please do grow up and debate it like an adult, willya? I wonder what it was that set you off, my friend. Was it my quoting of the literal text of the Hyde Act contradicting your ideas? Was it the analysis I presented of the OPEC vs NSG? Was is the demolition of your argument about interdependence by calculating the potential financial impact as an approximation of the degree of dependence?

Seriously, I am here to engage in an intelligent debate because I deeply care about the future of India. Unlike you, I am not reducing this to taking cheap potshots. Now if only you could rise above personal attacks on me and Shourie etc and present some analysis backed by facts then I would love to hear it. I do believe that you are a patriot just as I am. But real debate must be on the basis of ideas, facts and analysis : all I have done is let the facts speak for themselves.

I have nothing against you personally, I am sure you are nice intelligent person. All I have done is point out that your arguments are not supported by facts, as written in the 123 agreement or the Hyde Act. If you are serious about debating this issue, then show me where I am wrong.

1.You said that India could develop alternate sources of uranium like Russia and France. I showed you that US policy, as defined in the Hyde Act, is to further restrict Indiaâ€™s trade with the NSG members. I further showed you by applying lessons from the world oil market why it is unlikely that India can do it on economic grounds.

2.You claim that India has a right to test. I agreed with the theoretical right to test, but showed you that, in practice, the power to exercise that right is severely limited by the 123 agreement if the US threatens to jeopardize a significant part of Indiaâ€™s electricity generation.

3.You claim that India can free up its domestic production of uranium for the nuclear program. I showed you that the US policy, as clearly spelt out in the Hyde Act, is to prevent that. The Congress has put annual certification mechanisms in place to ensure this. It will require a full material balance and accounting of not only imported uranium but also uranium mined in India. So that is unlikely to happen.

So, please do tell, where the flaws in my facts or logic are. If you just want to stoop down to personal attacks or paint me as the kind of person whoâ€™d subject you to socialism, all I can do is treat that with amusement at a childlike tantrum. I can assure you that I am a fearless participant in the international jungle of business and I am only applying the lessons Iâ€™ve learnt in my career. Rather than speculating on what kind of a person I am why donâ€™t you figure out rationally what is likely to happen? Even your idea of my arguments being self-fulfilling prophesies are silly : I am not an American and my thinking is not likely to affect how they act one way or the other. All I am trying to do is rationally figure out where the incentives for their future behaviors are. Sure, I may be wrong and they may all be as nice as Mahatma Gandhi, and everything will be well – India will get its fuel, grow its economy, build a nuclear arsenal and have independence in pursuing policy as well. Or may be the incentives Americans are trying to put in place are designed to enable them to exercise power to control what India can do in future. What will a rational actor do? You decide.

Actually, on second thoughts, I am confused about why you are talking about my fear-mongering about Americansâ€™ potentially cheating India. Whereâ€™s the question of any cheating? The Americans have been absolutely up-front about their intentions : itâ€™s spelt out right there in the 1954 Atomic Energy Act, Hyde Act and the 123 Agreement. All I am saying is that Americans are going to be true to their stated policies, enacted laws and clearly enunciated intentions. Are you suggesting that Americans are making laws that, you have somehow divined, will not be applied to India? Is the US Congress just doing timepass and making laws that it is not going to hold the executive branch accountable to?

Saying that NSG *will* put restrictions is not an argument, it is speculation. This has not yet happened. Negotiations are still going on.

I will say one more thing that might comfort you. We all know that Russia is already helping us with a couple of our civilian reactors. How? Well, because Russia argued that it made those commitments to India before joining NSG and hence they have to be fulfilled.

If NSG gives India a clean waiver (and I agree that it is going to be a big challenge) and India signs deals with supplier countries.. and lets say 5 years later India tests (for whatever reasons).. then supplier countries would have a legal fig leaf to hide behind while continuing cooperation with us. Yes, countries like Australia and Japan would follow the US lead blindly.. but countries like Russia and France are highly unlikely to be submissive. What incentive does Russia have to follow USA’s domestic laws? None.

Gujjubhai’s argument is that USA has domestic laws. Well, so what? USA might as well have a law that says “Screw India”, that does not mean that it will be able to.. or that it will even try. And if it tries, would we just lie down and wait for it to screw us? (Shayam Saran’s words, not mine, from his interview with Karan Thapar)

Another arguments is that US will somehow prevent Indian fuel from being used in our weapons programme. This is the funniest thing ever. How? No answer.. except saying that they are devious and cunning and blah. Ask yourself, how is it possible *to* stop Indian fuel from reaching *un-safeguarded* Indian reactors on Indian soil? It is not.

Finally, the right to test is always a theoretical right. In practice, when it becomes imperative to test, then a country will just go ahead and test regardless of what international commitments it has made to the contrary. India hasn’t even made such a commitments.

Also, under the international law, sub-critical tests are not included in the definition of “nuclear test”. Now there’s a hint for those who can understand it.

Chandra,

I accept that one of my comments was personal and directed against Gujjubhai. It was entirely intentional. He started with calling Nitin a traitor and whatnot (see his very first comment at No. 21) and calling Manmohan Singh the same (Mir Jaffer reborn, Moron Singh). That comment had nothing substantive except pointing to a couple of articles. If that comment does not invite censure from you, while my comment does.. then I am just amazed.

Regardless of this, if Gujjubhai is willing to withdraw his comment and apologize to Nitin then I would request Nitin to remove my comment as well.

Last point.. merely leaving a link to some article and asking others to refute it is not debate. It is an escape tactic. I can also post links to several articles by non-political people that support the deal.. and say “I rest my case”. But it would be bullshit. And I called Gujjubhai out on that.

All his arguments have one basic premise.. *they* are smart, cunning, devious etc.. while we are not. I reject this basic premise completely.

It turns out that the among the most strident opponents of India extracting uranium reserves at home are, well, the Leftists. Here’s a post from Dec 2005 on the subject. And I’d like to know the sources of funding of the various NGOs raising storm over uranium mining.

On being prompted by Nitin, I read his comment and the reactions. A very fierce, passionate debate and both sides mean well for the country, I think. Somehow, the characterisation of those who welcome the deal as being self-confident and forward-looking and those who oppose it as being weak and lacking in confidence on Indians is not wholly accurate.

Nitin cleverly turns one point made by “Gujjubhai” on him back by saying that if he figured out how to deal with them, why not the rest of the Indians? On the surface, it is a fair point.

the reality seems to be that such people seem to be relatively rare amongst those who actually do the negotiating on behalf of the Indian government and second, even if they are there, they seem to be subject to other non-transparent considerations of the political establishment such that their voices are muted.

It is one thing to say that yes, let the Americans have their laws and if they to invoke them against us at a later date, we would find a way out but it is entirely another thing to try and figure out how one could have gotten a better deal without having to go through the stress and uncertainty that would surely arise if the provisions of the Hyde Act are invoked.

When the other side appeared desperate for a deal (April – June 2007) with press statements every day, I think there was ample opportunity to have deployed brinkmanship and wait for other guy to blink. We did not, it appears and of course, one can always hope that we would learn, for the next round. But that does not make it wrong for some one to criticise the outcome and the quality of the current negotiations.

On one thing “Gujjubhai” seems to be correct is that the provisions of the Hyde Act as applicable to India do actively seek to prevent the US government from trying to help India secure alternative supplies.

The 123 agreement says otherwise but it is finally subject to the overriding provisions of the Hyde Act. The letter of the 123 Agreement is clear on that.

In the final analysis, a lot is left to the continued goodwill and benevolence of successive American administrations towards India.

At the same time, it is hard, personally for me at least, to dismiss the arguments of those who say that other governments do not leave things to such variables and get them in B&W in writing for it is the written word that survives and also the contention that this was an opportunity to extract more out of the Americans in terms of Indo-Pak. dynamics, arm sales, cross-border terrorism, etc.

Notwithstanding the previous paragraph, if that is a strategic bet/calculation that Dr. Singh has taken, he is entitled to do so. That is what is leadership is all about. Equally, the nation is entitled to ask him the benefits that India would get by doing so, the potential costs of doing so and how, in his judgement, the former outweighs the latter.

(Nitin: you might wish to write to Dr. Sagar and seek his permission to post his email that I had circulated to my mailing list on this as a comment. He says that the issue is not one of testing at all. He says that he believes that India has the capability to do a successful computer simulation. He says it is about the availability of sufficient fissile material, intrusive annual inspections, classification of old reactors as military and all new ones as civilian, the economics of using Uranium when its cost has shot up already through the sky and the safety of using enriched uranium when all other technologies are available, etc. I think all these points too are relevant besides the issue of American strategic interest (or otherwise) towards India).

Dr M Vidyasagar’s take on the matter (and not a direct response to this post); received by email and posted with permission:

The headline (“A good deal but very bad politics”) can apply equally well
not just to the nuclear deal, but also to the manner in which the UPA
government has gone about negotiating it.

Surely it was up to the Foreign Secretary (Shivashankar Menon), the
External Affairs Ministry (Pranab Mukherjee) and the PM himself to have
made all of these comments during the various phases of the negotiations!
Instead the government has gone about its negotiations with the following
three salient features.

1. Their attitude has been: “The deal is done — if you don’t like it you
can lump it.” This has been their attitude not just to the public at
large, but also to opposition parties, and even the Indian nuclear
scientists.

2. They have planted stories and editorials in various newspapers, the
Indian Express being the most obvious prostitute and up for sale to the
highest bidder, essentially rubbishing the Indian nuclear scientific
establishment and its contributions to date.

3. They have encouraged the peddlers of the outdated, obsolete, and
dangerous American nuclear technology to fantasize about sales of up to $
100 BILLION (yes, you read that right) worth of nuclear “technology” to
meet India’s energy needs. This is of course consistent with Item 2
above.

My own reaction to the deal has been as follows.

A. THE MANNER IN WHICH THE DEAL HAS BEEN NEGOTIATED

I have not wasted my brain cells reading every full stop and comma of the
deal. What is the point? Whether the deal is good or bad, this
government is determined to shove it down our throats. I would have spent
some time thinking about and analyzing the deal if the government had
shown any flexibility, but it has been determined not to give an inch.

Aside from the incongruity of this attitude in a democratic society, the
UPA government has also left itself open to being outmaneuvered a second
time on the 123 arrangement, just as happened earlier with the Hyde Act.
In the case of the original nuclear agreement announced with President
Bush visited here, the US establishment played its “good cop, bad cop”
role to perfection, with the Presidency stating that it is helpless and
that treaties are actually approved by the Congress, and then pushed
through the Hyde Act which differed very substantially from the original
announcement. In contrast, our own government was held hostage to the
*principle* of signing a deal with the USA, rather than to the *specifics*
of the deal. This is why, even as the goalposts kept shifting, the UPA
government was never in a position to say “Enough is enough — THIS is not
the deal to which we agreed!” Let us not forget that even the so-called
123 agreement is still not US law, and is subject to the very same “bait
and switch” tactics as were employed with the original Bush-Singh
“agreement.”

In India we do not have “separation of powers” in the American way, so the
“good cop, bad cop” routine is harder to pull off in India. The
Parliament can hardly renege on approving a deal that the government of
the day has negotiated, as is possible in the USA. If the UPA government
had any brains (which is of course like saying “If the Congressmen had any
backbone”), they could have had their own “bad cops” in the form of all
the entities in civil society that are beyond their control, such as the
opposition, “public opinion” etc. and said “Just as you (US President)
have been forced to deviate from what you promised, so have we!” But of
course, fantasizing about such things will never get us anywhere.
Remember the Shimla Agreement, when Indira Gandhi let slip the opportunity
to settle the Kashmir border issue once and for all. We are always more
considerate of the other side’s feelings than we are for our own
countrymen!

B. THE AFTERMATH

I myself am less exercised about the test ban than I am about the flow of
dangerous American nuclear technology into India. We can live with a cap
on our fissile material, unless this stupid government goes and negotiates
a cap on the delivery mechanisms (meaning missiles) — something that they
are capable of doing! But I get REALLY worried when I read that companies
such as GE etc. are licking their chops in anticipation of mega orders
from India for their nuclear reactors.

Let me remind you that there are only two countries in the world that use
ENRICHED uranium — the USA and Russia. It is not entirely a coincidence
that these are also the same two countries to have had serious nuclear
accidents. In contrast, practically every other country (France, Canada,
Germany, …) use NATURAL uranium. Our own technology, originally
imported from Canada but now thoroughly indigenized, uses natural uranium
too.

Ever since 1974, the Indian nuclear scientists have been evolving ever
more clever ways to get around the ban on the supply of nuclear fuel. The
development of fuel rods for the RAPP and TAPP based on Thorium, and the
developments in fast breeder technology at Kalpakkam, are two examples.
In contrast, the American companies have not supplied any nuclear power
after the Three Mile Island disaster in the 1970s, and of course have not
invested one penny in improving their nuclear technology. Is THIS the
technology on which we want to base our nuclear power plants?

In order to have a steady supply of nuclear power, two things are needed:
nuclear technology, and INVESTMENT in nuclear power plants. Successive
Indian governments have neglected the latter, but found it expedient to
blame the energy shortfall on the alleged inadequacies of the former.
Even now, whatever be the shortcomings of the treaty, if the government
uses the positive negotiations with the Nuclear Suppliers Group (something
that is by no means guaranteed, by the way) to invest in the upgradation
and enhancement of OUR own nuclear technology, some good can still can
come out of all this. But if the deal only opens the door for middlemen
and corrupt “power brokers” (pun intended) to dump obsolete and dangerous
American nuclear technology on a defenceless Indian public, then all of
our lives are at risk — and not just metaphorically but quite literally.

Perhaps the best debate in the Indian blogosphere on this issue, especially if you skip the part where the people question each other’s patriotism. I have no knowledge and hence no intention of participating.

Can we be sure though that the hue and cry we are going thru right now, is not a staged “bad cop” routine?

1. How is that US was able to stop Narasimha Rao from going ahead with a nuclear test? Didn’t India spend atleast 3 years in the doghouse for the nuclear tests of 1998? What has changed between then and now? Did you really fall for the ‘India Shining’ thing?

2. How is that even before signing the deal, we have screwed the Indo-Iran gas pipeline (energy security, anyone!), voted against Iran at IAEA and are going to conduct naval exercises with US and other banana states only as a show of strength against China?

3. As some people have claimed above, if India can ignore American fuel and go elsewhere in the event of a stand off in the future, why could it not get more Cryogenics from Russia, why it could not prevent the Tarapore fiasco and even now why are we first going to US for a deal and then to NSG, IAEA, France, Russia, whatever?

I feel Indians are the victims of their own “we have arrived” propaganda. India may one day pay a heavy price for this over-confidence. And please don’t make your opinions after reading the Indian English Media!

Having said all this, I do support the deal. But I feel Manmohan Singh has been naive not to get enough protection against the Hyde Act.

hmm… I seem to disagree on the pipeline. In my opinion our energy security should be based on the following premises,

1. By the year X, India should meet all its fossil fuel needs from within the subcontinent or from our immediate neighborhood. Pipelines from Iran, Turkmenistan, Burma and Bangladesh help us not only to tap those resources but also improve relations with our neighbors. If we are not sourcing from them, then others especially the Chinese are going to. Its a waste, if you ask me.

2. By some year Y, India should meet significant portion of its energy needs from non-fossil fuels. This nuclear pact serves that purpose. But greater emphasis is needed on ethanol, wind and even on hydel projects.

3. The strategic concerns like the ‘neck at the supplier’s hand’ can be met when India becomes a major Petro hub. (we are already moving towards this). When we get raw fuel anyway for processing, it gives the cushion to starve any crisis that comes from disruption of pipeline supply/price bullying. i.e. Pipelines need not signal the rusting of our Petro ports. And ofcourse we shud have significant strategic reserves.

Search across INI

I believe Indian diplomacy has not been particularly awake in allowing huge quantities of spent fuel from Tarapur 1 and Tarapur 2 to accumulate outside the reactor adding to potential radiation-release problems should an untoward incident take place as it did in Japan recently.

I would like to submit that this deal should be opposed because it will come in the way of India’s development of high technology. It is not a mere coincidence that whatever progress India has achieved in the nuclear electricity field has been during the time when the “technology control regime” was at its fiercest. As a loving parent, one would attempt to wean away a child, learning to walk, from his/her walker after (s)he gets some dexterity in that activity.

Contrary to what many would like the general public to believe, India still has a lot of distance to cover even in PHWR technology if it wants to trade in nuclear technology with advanced countries on an equal footing (technology-wise). The situation could be worse in the case of Fast Reactors. In critical fields, India’s strategy should be to import only those components that can be made in India but are cheaper to get from abroad; strive as far as possible to avoid importing just because the item cannot be currently made in India.

Exaggerated statistical projections of the quantum of electricity requirments in the near and far future, and actions taken on the basis of those data, ultimately would tend to be counter-productive. Pace of development can only be enhanced with internal strengths; perennially seeking external help is not the way.

Please pardon me for the sermon!

Nitin

Dear Mayurdas,

Thanks for the comment.

I would like to submit that this deal should be opposed because it will come in the way of Indiaâ€™s development of high technology.

And I think it is necessary for precisely the same reason—India’s own technological base will benefit from the deal. We could have spent decades perfecting the Ambassador; but within a decade of liberalisation Tata was producing the Indica. I don’t think employees and management of Hindustan Motors would have agreed (in mid-1990s) that deregulating the automobile industry would be good for the consumer as well as for the domestic industry itself.

I agree with you that India’s state-owned nuclear corporations must invest in areas where they can be globally competitive. But this can be done while opening the plain-vanilla segment to international competition.

A+, Nitin! As I have come to rationally expect from the Acorn, you have written a careful and well thought through analysis.

I have one misgiving about the deal:

… should the United States decide to terminate the agreement and recall the fuel and components it supplied.

This right to recall is provided to the President of the United States under the Atomic Energy Act of 1954, and is at the core of the Hyde Act. Is the right to recall, a right to be compensated (in cash or kind) adequately for the fuel and the components supplied, or does it imply that India merely gets the use rights on the components (fuel would have been spent anyway) and not absolute property rights? This may seem like a pedantic question, but I worry because the US has (as any other self-respecting nation would too) in the past gone to war with nations to reclaim what it deemed as its property. Has there been any clarification from either side? Thanks.

Nitin

Rational Fool,

Thanks.

Indeed, the biggest open question is what happens if either party wants to terminate the deal. There seems to be an understanding that the should the US recall what it supplied, then it will have to compensate India accordingly. All we know is that it will involve “consultations”—essentially more negotiations. Allowing this to be open ended is likely to have been necessary to make the problem tractable.

In the worst case, the US could slap odious sanctions, place India in the doghouse etc; but it is unlikely to resort to use military force.

I am not exactly sure what BJP wants. May be opposition for the sake of opposition that all Indian political parties follow because these type of issues don’t matter when it comes to elections and if things go wrong, it can always fall back on an I told you so.

Nitin

I received this comment (via email) from an informed observer:

Here is my understanding of the Article 14, which deals with
termination of the agreement:

Article 14 (1): It is clear that the agreement can not be terminated
in any way other than a 1 year notice. 14 (2) and 14 (3) add further
conditions for termination. These could make the termination an affair
longer than 1 year, but not less under any circumstances. 14 (2) makes
it clear that the “circumstances” like “changed security environment”
or “response to similar actions by other States” *must* be taken into
account before termination takes place.

Article 14 (4): Only *after* the termination of the agreement can the
parties exercise the right to recall material, equipment, components
etc. Not before the termination. Even if the notice invoking the right
to recall stuff is delivered along with the notice for termination,
the minimum duration is still 1 year, no less.

Article 14 (5): It makes clear that exercising the right of return
would have “profound implications” for bilateral relations. It puts
further safeguards in place for exercising this right – consideration
for uninterrupted operation of civilian nuclear reactors, and
potential negative consequences for on-going contracts and projects
(billions of dollars, basically). 14 (6) states clearly that
compensation at “fair market value” would have to be paid in case this
right is invoked. 14 (7) and 14 (8) are just technical clauses about
the safety procedures etc. and 14 (8) refers to Article 5 (6) which
contains the US obligations and states that the purpose of Article 14
(all clauses) is not to derogate from the rights of parties contained
in 5 (6).

Article 14 (9): It refers to Article 6 (iii) about the dedicated
reprocessing facility and states that it may be suspended by either
party in “exceptional circumstances” (as defined by the parties)
*after* consultations have been held.

Overall, it is pretty clear that while the parties do not trust each
other to the fullest extent (given the baggage of history, they really
can’t) they realize the importance of this agreement and have put a
lot of emphasis on making termination difficult.

The only thing that would be liable for almost immediate suspension is
the dedicated reprocessing facility. As you may notice, this is a
superficial clause because there is no way for anyone to make India
stop the reprocessing – it will be an Indian facility operated by
India on Indian soil. The fuel supply may be suspended under the same
clause, but the stockpile (only the part that came from the US) need
not be returned for 1 whole year (during which period the reprocessing
would go ahead of course).

If you read between the lines, it is clear that an unprovoked test is
not considered to be a real possibility by both countries.

A likely scenario, that might play out, is this: US tests, China tests
in response (Russia might also test) and then India tests (to be
followed by Pakistan). You can reverse US and China in this scenario.
In this scenario, I expect the US to put pressure on India to not
test. But the thing to keep in mind is that this scenario is not
affected by the deal. This scenario would play out in this regardless
of whether we have a deal or not.

Invalid

[…]I expect the US to put pressure on India to not test…….This scenario would play out in this regardless of whether we have a deal or not.

Agreed, but with the deal on, US will have a clear picture of how to apply pressure. If there are enough clauses to shield us from the pressure, then there is no issue with the deal. It would be good if India Govt explains (with all possible scenarios which she thinks can happen) to its citizens about the deal in detail.

“In reality, the geopolitical and economic costs of testing unilaterally outweigh any benefits that might accrue to improving Indiaâ€™s deterrence posture. This calculation will change materially if India were to test in response to a Chinese, Pakistani or perhaps even an Iranian test. Or jointly with like-minded nuclear powers.”

But shouldn’t tests be conducted in response to development requirement. I do find test in response of test a bit cowboyish.

“Those who worry about the â€˜rightâ€™ to test miss an important aspect of a great powerâ€”that international laws are subsidiary to its national interests. As the Indian Express put it in a recent editorial, â€œalthough agreements between nations do codify a particular understanding at a given point in time, future interpretation and action by states are based on cold calculations of interestsâ€. The â€˜legal rightâ€™ to test is a red herring.”

I dont know about great power but to me India is a soft nation

Nitin

Gaurav,

But shouldnâ€™t tests be conducted in response to development requirement. I do find test in response of test a bit cowboyish.

Technically, yes. That’s how it worked in the 60s, 70s and even 80s. But now, you can’t test for development reasons without causing international opprobrium.

So while testing in response does sound cowboyish, it also offers an opportunity to carry out the development tests that would not have been possible otherwise.

To me, the “deal” is not the natural or even stable state of things. “No Deal” is the natural state.

The contributions of NRIs towards furthering this deal is worrisome to say the least. To me they are citizens of a foreign country and I am not convinced that Indias interests will be uppermost in their mind, compared to issues like family based immigration, more worker visas, or even an empowered Indian lobby in the Capitol.

Having said that, the mere fact that NRIs have lobbied hard does not reflect on the merits of the deal per se.

We ought to first have a discussion on the merits of moving from a stable state (of no deal) to a possibly unstable (I hope not) of *deal*.

India needs 50,000 MW of power generation in the next 20 years. Okay plus points for that. American made nuclear power plants running on American fuel make a cute targets for terrorists. Minus points for that. Indian reactors under surveillance , whereas Pakistanis can do whatever they want. (please dont tell me that the Americans once they are here do not have the means to find out the minute details of the so-called research reactors).

I am looking for an informed discussion on the merits along the above lines. Where can I find that ?

Oldtimer

Regardless of whether it is a good deal or bad deal, the government and the prime minister do seem to be misleading the nation (and parliament) on its implications.

—

N-deal will scrap if India goes for atomic test

PTI | Washington

The United States has made it clear that the civilian nuclear deal with India will be “terminated” in the event of an atomic test by New Delhi.

“The proposed 123 Agreement has provisions in it that in an event of a nuclear test by India, then all nuclear cooperation is terminated,” US State Department Spokesman Sean McCormack said on Tuesday.

The spokesman also said there is “provision for return of all materials, including reprocessed material covered by the Agreement.”

India has been maintaining that the 123 Agreement is silent on the issue of testing. Prime Minister Manmohan Singh told Parliament on Monday that the Agreement to operationalise the civilian nuclear deal would not affect India’s right to undertake future nuclear tests.

I’m disappointed at the last two paragraphs in your otherwise well written post.

1. shud the BJP praise the deal simply because the Indian middle class doesn’t read the nitty gritty of the deal and is happy that India and US are bhai-bhais now? what appalling non-sense.

2. lets decipher what the BJP has done.

a. it has been very much involved in the negotiations. (and Manmohan also needs to be praised for keeping them in the loop.) the questions is will the BJP have accepted this deal without pushing a little further to get more out of it? are Manmohan Singh and Bush imposing unnecessary time limits on concluding this deal which might be detrimental to Indian interests?
b. Yashwant Sinha called Singh’s statement ‘a bunch of untruths, half-truths and white lies’. is it not true that Singh has been dishing out half-truths about the Hyde act and has not been forthcoming in explaining the state of the deal if India wants to voluntarily conduct a nuclear test? even if he expects the ‘one year explanation/withdrawal’ phase is sufficient, why shud all of us share his optimism?
c. advani has agreed that there is no such thing called ratification. he has sought ‘renegotiation’. even if we don’t renegotiate this, should not the government keep the opposition’s view in mind when it works with the US and the NSG to set the ball rolling.
d. BJP has demanded a debate under rule 184. whats wrong with that. why shud BJP bail this government out if it by itself cannot get the numbers? is it BJP’s job to help Manmohan kiss and make up with Karat? for heaven’s sake this is just a resolution not a money bill. hasn’t BJP expressed its willingness to support several economic bills on which Manmohan is pussy-footing fearing the left. pension reforms for instance?
e. even if we take your silly logic that BJP is hurting itself by ‘opposing’ the agreement, isn’t that what we expect from our political parties? shud they play to the gallery or stand up for what they believe?

The Tamasha news culture (read CNN-IBN!) seems to have corrupted all our minds. We have just seen democracy at its best.

1. Govt does a decent job in coming up with a deal and is courteous enough to keep the principal opposition party in the loop.
2. The principal opposition party gives all its inputs when asked for behind the scene and also tries to educate the public on the weak points in the deal.
3. There is a fringe left which brings in the broader picture (pro or anti US debate) while giving reasonable assurance that its not out to destabilize the govt.

I wish we all appreciate this ‘right way’ of doing things in India instead of bringing petty political considerations into the debate.

Exactly. Not standing up (in Parliament, where it counts) for what they believe is exactly the problem with the post-2004 BJP. Perhaps you have facts to support your case that they ‘stand up’ for what they believe. Or have they only ‘walked out’ for what they believe?

Sriram

Bad politics or not, the government seems to be spinning different stories everytime. Just when they said India could conduct future tests, there are news reports that say US will terminate the deal. Lots of misinformation if you ask me.

Even I would like to see them debate than shout in parliament. Advani had said they would this time. Walking out, shouting are unfortunately some of the ways to get the message across. We need not be too critical of that unless they stand up for what they believe either inside or outside the house.

btw there are lots of things bad about the BJP. their stand on the nuclear deal is not one of them.

B.O.K.

Gujjubhai,

“To support this insidious deal is nothing short of high treason, an act utterly destructive of Indiaâ€™s national interest.”

That’s a tall claim to make, especially when it is based on someone else’s politically-motivated analysis.

There is not a single objection (from the Indian side) to the deal that can not be answered by a reading of the 123 text and application of some common sense.

At the heart of objections to the deal is this simple question:

Q. Do we have the right to test?

A. We do. There is nothing in the 123 text that says that India will not test. The 123 text says that the US will have the right to seek return of whatever it supplied (it doesn’t say “in the event of a test”, but it is understood). So what? The deal will be operationalized only after we have an Agreement with IAEA and a waiver from NSG. This means that there would be other suppliers (notably France and Russia besides scores of others). How the heck is Hyde Act going to stop THEM from supplying stuff to India? In fact, if the US steps aside, it would create an even larger market opportunity for other countries. I hope you realize that we are talking about tens (a few years down the line, hundreds) of billions of dollars here. Russia is already committed to supplying 4 reactors to India as soon as NSG gives a waiver to India (and they want to supply more). This is public knowledge, BTW (read some news items from the time of Putin’s visit to India in January this year).

Nukes gave a sense on security in the Cold War, when nothing mattered much except a clash of ideologies. This is not true anymore. Security is attained today by creating economic interdependencies. That is what rules out war in today’s world between countries like USA and China, or indeed, USA and Russia. Yes, there would still be posturing.. but that is all there is to it and that too will never go to the extent of Cuban Missile Crisis. Failure to understand this simple thing indicates a huge lack of intellect.

India and USA have a trust deficit because of our historical baggage. With that in mind, how the heck does anyone expect the USA to provide all-out support to India, especially in matters Nuclear? It is obvious that the deal is nothing except a step in a much stronger relationship. This is a logical follow-up to what Narsimha Rao started and Vajpayeed continued. A few years down the line, when this limited deal is operational, there would be another deal, and then another. This is how you build relationships up.

“At stake is nothing less than the complete annihilation of Indiaâ€™s capacity to defend itself from the Chinese and the imposition of nuclear slavery by the Americans.”

And how exactly are the Americans going to achieve this? And how exactly does this serve American interests?

If there is anything at stake, it is the freeing up of our minds from colonial and cold war phobias. This perpetual fear that others are out to get us.. that they are all immoral while we are paragons of virtue.. this mistaken belief that we are innocent and naive while the others are smart and cunning.. this HAS to go.

There is only one opposition to the deal that makes sense, but it is not from the Indian side – it is from the Nuclear Non-proliferation lobby. And it is the simple mathematical calculation that India would be able to use her domestic nuclear fuel for the weapons programme while running the civilian reactors on foreign supplies. If you read the deal (it’s plain English, you should try it instead of swallowing political propaganda), you can see that this is indeed true. And the only reason that India is being allowed to get away with this is our clean record on non-proliferation and the understanding that India has no interest in deploying nuclear weapons except in retaliation against a possible nuclear strike from Pakistan (China would never do it, it is not stupid) in the event that its nukes fall in the wrong hands.

And if you (being an Indian, along with being a Gujjubhai) have any objection to THAT, then I humbly suggest that it may be you, not Nitin, who is committing high treason and utterly destroying India’s national interest.

Pankaj

Thanks BOK,

Your views have provided much clarity. Its completely bizarre to see Mr. Advani hand in glove with karat and co., the official chinese clients operating in India.

Either Mr. Advani is taking advice from people who have shady links with communists – or age has made him a full time resident of cuckooland. Even Mr. Shourie, the best of men, refuses to give it a rest.

I think once Kakodkar and a majority of nuclear community gave their consent to the deal, along with US assurances that India can test in reply to paki or chinese tests, we should all see this as a good national achievement and move on.

Let the chinese clients in India stew in their own petty hatreds and propaganda. They are eventually headed towards the garbage bins of history.

Nitin

Gujjubhai,

I have nothing to add. Mr Shourie writes well, and does a nice job running through the text and speeches. But the gist of his conclusions have been addressed in this post. Also, do note that whether or not Dr Manmohan Singh’s government did a good job in ‘selling’ this to the nation is quite a different matter from whether or not the deal damages the national interest.

At stake is nothing less than the complete annihilation of Indiaâ€™s capacity to defend itself from the Chinese and the imposition of nuclear slavery by the Americans.

Surely you exaggerate. But if you really believe this literally, then I’ll just say that I don’t share your lack of confidence in India’s strengths.

Nitin

Dear Gujjubhai,

You are making a passionate argument against the deal, based as I am sure, in your belief that it is against the national interest, although I suspect that your conclusion is a result of overly crediting the Americans and underestimating the Indians. You are entitled to your opinions. But it should be possible for right-thinking people to disagree on matters without belittling those you disagree with or by raising those you agree with onto a pedestal.

To me, itâ€™s obvious that the reason why India negotiated such a bad deal is because I donâ€™t think any of Indian negotiators deals with Americans day in and day out in a competitive fashion.

I recommend Strobe Talbott’s excellent little book: Engaging India. But I fear you’ll say “Of course, the Americans are not stupid enough not to seduce Indian officials with praise…” 🙂

Gujjubhai

BOK,

Did you even read the articles from Shourie? To insinuate that a person of proven integrity and fierce intellect such as Shourie is politically motivated is a low-level of ad hominem attack that I would expect only Con-gressis and secularists to stoop down to. You have basically just regurgitated the governmentâ€™s talking points without reading the text itself or understanding how the Americans have crafted an elaborate framework of laws and strategies to exert power and control over India, of which the 123 agreement is only one cog in the wheel.

Suffice it to say that all of your counter-arguments are based on wishful thinking or lack of understanding the sophisticated game that the Americans have played.

Let me dispense with a few of your counter-arguments:

â€œQ. Do we have the right to test?
A. We do. There is nothing in the 123 text that says that India will not test.â€
Of course, there is nothing to explicitly bar India from testing : the Americans are not stupid enough to put such a political non-starter in writing in such a deal. I am amazed at the stupid MSM tom-tomming this as if itâ€™s a great achievement! Of course, the real objective of Americans is to create influence on Indiaâ€™s making that decision. The theoretical â€œright to testâ€ is useless in the face of the grave consequences of actually testing that India is signing on to. Americans have basically put themselves in a controlling situation whereby they hold a loaded gun to Indiaâ€™s head which says that â€œwell, you have a right to test, but if you go ahead, say good bye to 10-20 years of investments in your nuclear industry and the electricity generationâ€. Do you even understand the term leverage? If yes, do you see how US is creating leverage over India?
â€œThis means that there would be other suppliers (notably France and Russia besides scores of others). How the heck is Hyde Act going to stop THEM from supplying stuff to India?â€

You think the Americans are so stupid that they will allow India to game the 123 Actâ€™s restrictions by creating competition among suppliers? For one, the Hyde Act explicitly mentions that the US must pro-actively work to prevent this situation from arising. I must ask you again if you even read Shourieâ€™s analysis of the relevant clauses in the 123 Agreement. But since you donâ€™t even trust Shourie, let me quote you the summary of Section 103 of the Hyde Act:

â€œStates as U.S. policy the following: (1) to end the production by India and Pakistan of fissile materials for nuclear weapons and other nuclear explosive devices; (2) to achieve the government of Indiaâ€™s cooperation in the full range of international nonproliferation regimes and activities; (3) to ensure Indiaâ€™s compliance with arms control agreements and ensure that any safeguards agreement or Additional Protocol thereto to which India is a party with the International Atomic Energy Agency (IAEA) can reliably safeguard any export or reexport to India of any nuclear materials and equipment; (4) to meet specified requirements of the Atomic Energy Act of 1954 (AEA); (5) to act in a manner consistent with the Guidelines for Nuclear Transfers and the Guidelines for Transfers of Nuclear-Related Dual-Use Equipment, Materials, Software and Related Technology developed by the multilateral Nuclear Suppliers Group (NSG); (6) to work with NSG members to further restrict the transfers of such equipment and technologies; (7) to maintain international compliance with NPT; and (8) to ensure that exports of nuclear fuel to India do not contribute to increases in Indiaâ€™s production of fissile material for non-civilian purposes.â€

I assume you can read whatâ€™s written in plain English – the US policy is to restrict nuclear transfers through the NSG. In fact, this is even more horrible : not only is India entering into restrictions imposed by the US, it is also creating the situation whereby the US can legally influence all other members of the NSG to impose the same set of restrictions!! If this is not a Trojan Horse, then I donâ€™t know what is. You can be damnâ€™ sure that in the next stage of negotiations with the NSG, the US will wave the Hyde Act in Indiaâ€™s face and get the NSG as a whole to impose the same set of restrictions on trading with India. Already, Australia has warned that they will stop supply of Uranium if India tests.

And to think that Russia and France will break NSG rules to trade with India is just a foolish pipe dream. This is a naive understanding at best and betrays a lack of understanding of cartel behaviour. The incentive to cheat in a cartel can only arise if the gains from cheating are more than the potential losses of breaking ranks. Russia and France have much more at stake in ensuring that the worldwide Uranium market worth hundreds of billions of dollars continues to work smoothly and that they can continue to earn their fat cartel monopoly margins than trying to chase the small Indian market. Donâ€™t you think that other powerful members of the NSG such as US, Canada and Australia will retaliate against France and Russia if they saw those two attempting to break ranks? Study OPEC, my friend : even sworn enemies like Iran and Saudi Arabia choose to work together (a little cheating here and there notwithstanding) for controlling the worldwide market because there is way too much money involved. Even the worldâ€™s largest oil consumer US is unable to meaningfully influence the oil producers cartel even though it is best friends and protectors with the the most powerful member of the cartel, Saudi Arabia. Do you think that one of worldâ€™s smallest potential customer of Uranium India will be able to influence and engineer a break in the ranks of NSG?

â€œAnd it is the simple mathematical calculation that India would be able to use her domestic nuclear fuel for the weapons programme while running the civilian reactors on foreign supplies. If you read the deal (itâ€™s plain English, you should try it instead of swallowing political propaganda), you can see that this is indeed true.â€

Wrong again, my friend. Read the aforementioned summary of the US policy in the Hyde Act which I will quote again for your benefit :

â€œ8) to ensure that exports of nuclear fuel to India do not contribute to increases in Indiaâ€™s production of fissile material for non-civilian purposesâ€

Lest you think that this is an empty rhetoric, this is backed by a rigorous annual certification process in which the President of the US (POTUS) must satisfy the Congress that its objectives are being met. The onus will be on India to satisfy the POTUS that it is complying with the requirements of the Hyde Act because, guess what, the 123 Agreement mentions that the US will be governed by its domestic laws. This requirement creates further leverage on India.

Security is attained today by creating economic interdependencies.â€

You got that one right. However, by the same token, insecurity is created by one-sided dependence. In this case, where do you see interdependence? True interdependence in international relations takes hundreds of billions of dollars, my friend – not just a few or even tens of billions. True interdependence is between US and China where China depends upon US imports to keep millions employed and US depends upon China to keep the dollar stable due to the close to a trillion dollars in cash held by the Chinese. The proof of this interdependence shows up when the Treasury Secretary of the US Paulson actually lobbies the US Senators like Charles Schumer to prevent them from enacting laws that would impose punitive tariffs on Chinese imports!

See this

Here, on the other hand, India is creating one-sided dependency. India will become dependent upon the sole benevolence of the US to get fuel, use fuel, hope that it wonâ€™t be repossessed, and put may be 50,000 MW or so of Indiaâ€™s electricity generation at USâ€™s mercy which is, say, worth at most $50 billion including the future value of fuel supplies. On the other hand, what is the US dependency? Not a whole heck of a lot : US companies will get paid when they supply equipment and uranium to India. If the US wants to repossess that stuff, the depreciated book value of those assets and spent fuel will be at most 20-30% of the original investment which is, say $10 billion. Remember that US companies have already got paid, so the repossession cost will solely be born by the US government. Do you think that a government whose annual budget is in trillions of dollars will care about a hit of $10 billion? Thatâ€™s just the rounding error in second decimal point!

So, do you see the hugely asymmetric nature of the dependency? For $10 billion, US is getting itself an option to control and potentially disrupt a huge part of the Indian electricity grid, which it could use to destabilize the Indian economy if it wanted. It doesnâ€™t even actually have to do it, just a few threats in secretive back-rooms about potentially adverse effect on the Indian power grid will be enough to persuade any future government from doing anything that Americans donâ€™t like whether itâ€™s our relations with Iran or nuclear testing or whatever. That, my friend, is one hell of a sophisticated economic war strategy.

â€œIf there is anything at stake, it is the freeing up of our minds from colonial and cold war phobias. This perpetual fear that others are out to get us.â€

My favourite quote of all time : just because you are not paranoid does not mean that they are not out to get you. Stop being naive. Stop being foolish. Stop seeing things through the lens of friendship, enmity etc : understand interests and motivations. The US has a commercial interest in selling stuff to India and making money, but it has an even larger objective of remaining the sole superpower. Understanding that motivation is key to analyzing US behavior and its motivations behind signing this deal.

Basically, the deal is good for the US because it makes money for US companies, and gives it a stick to beat India with if India wants to do anything that the US does not like, and clips Indiaâ€™s wings thereby preventing any potential challenge to USâ€™s global power in the future.

International relationships are a complex web of creating and exercising leverage. Different fora bring different interests together. Nations can work together when it suits them but also screw each other over when that is in their interests. US is neither friend nor foe and India should neither be fearful of Americans due to cold war baggage nor naively euphoric about the brave new world of strategic partnership. Strategic partnership, democratic alliance etc are just empty marketing slogans. Just ask yourself this : if the US were really serious about strategic partnership with India, why did it not give a better 123 deal to India than China?

To me, itâ€™s obvious that the reason why India negotiated such a bad deal is because I donâ€™t think any of Indian negotiators deals with Americans day in and day out in a competitive fashion. I do business with Americans and I see the same behavior in every deal I have ever negotiated with them. They use the same strategies and tactics to advance their interests and extract profit in business, as they have used in negotiating this deal. Start with flattery, paint a rosy picture, the CEO pretends to really love India and makes unprecedented big concessions to your company compared to your competitors, and then the lawyers come out with a fully-loaded one sided agreement. The CEO and the lawyers play the good cop-bad cop routine, the CEO keeps telling you that he is trying to tell his lawyers to make the deal better for you, and then finally tries to sell you the same deal with a few watered down provisions but essentially still loaded in their favor. You play this game a few times and learn at your own cost. Of course, now I take pleasure in playing the same game with them and screwing them over. But I have hardly come across Indians – even techies who have worked in the US for many years but stuck to the engineering side – who have a real understanding of how the American mind works. Fundamentally, the American mind is absolutely obsessed with looking out for No 1 – ensuring the supremacy of the individual or his firm or America as country by means of guns, lawyers and destruction of competition. On the other hand, Indiaâ€™s lead negotiator had this to say:

â€œDid we have lawyers?
No, our country is not litigious like that. We donâ€™t have prenuptial agreements before one gets married here!â€

I rest my case.

B.O.K.

Gujjubhai,

Aap purush nahi hain.. mahapurush hain!

Tell us more about these mysterious “Americans” of yours. How do they look? What do they eat? What do they wear? What language do they speak? I have never even seen one, leave alone negotiate with such mysterious creatures.

Reading your comment, I just found out that people like Vajpayee and Shourie, who formed the government only once (essentially, though it was sworn in 3 times) had suddenly acquired the experience of dealing with “Americans” and laid the foundations of NSSP (whose direct result is the proposed Nuke deal).. while people like Manmohan Singh who had worked in IMF, been the Governor of RBI, and been the Finance Minister for a full term (apart from his other international experiences) along with his team of experienced bureaucrats, technocrats and diplomats have failed so disastrously that he has compromised our national interest for all times to come.

I guess Vajpayee and Shourie were probably in secret consultations with you before dealing with these mysterious “Americans”. Wow!

Clearly, I have a lot to learn from you.

Already, you have given us such a tremendous insight into the minds of these “Americans”:

“Fundamentally, the American mind is absolutely obsessed with looking out for No 1 – ensuring the supremacy of the individual or his firm or America as country by means of guns, lawyers and destruction of competition.”

Wow! They must really be stupid. I guess there is still some hope for India, where we have people like you. My only humble request to you is to contest the upcoming Lok Sabha elections (they are upcoming, aren’t they?) on BJP ticket and aim for the PM’s seat.

Hope to see you at 7 Race Course soon.

B.O.K.

I hope that the readers of this blog would realize that the arguments being made by “Gujjubhai” and several others are exactly the same kind of arguments with which socialism was forced on us several decades ago – the fear of outsiders and the terrifying lack of confidence in our own abilities.

When we give in to such arguments, they become self-fulfilling prophesies; if you act on the belief that the Americans will be able to cheat you no matter what you do, then be rest assured that they would.

It is possible to forgive our insecurities of our early years when we had just come out of a long colonial rule, but not now. Not again.

The choice is clear, isn’t it?

Gujjubhai

â€œYou are making a passionate argument against the deal, based as I am sure, in your belief that it is against the national interest, although I suspect that your conclusion is a result of overly crediting the Americans and underestimating the Indians.â€

My argument is anything but passionate. Itâ€™s a dispassionate and objective analysis of what the Americans have stated as their policy, the usage of their tools to achieve their policy goals and a deep understanding of the American mind based on many decades of dealing with them in competing for power and money – and succeeding, if I may say so myself. It is based on literally what they have codified in their laws and having a strong historical context on their behavior. It is exactly what they have said what they want to do.

Indian analysts, on the other hand, are writing stuff based on naive optimism. They are swallowing the American marketing hook line and sinker. There is a reason why Americans are the best marketers in the world – hell, they invented it. However, to separate the truth from reality, you must see their actions.

We are talking about a country that sent its Secretary of State to sell a pack of lies to the United Nations in broad daylight and then it invented fake reasons to invade a country and kill 500,000 innocent civilians. They have zero moral compunction in the naked pursuit of their national interest. Donâ€™t think for a moment that they will shy away from exerting power over India when needed. India is dealing with the most ruthless people on the planet today who are determined to remain the most powerful country for as long as they can. My point is not that they are evil : my point is that India should be just as ruthless in protecting its interests. This agreement falls far short of that requirement.

I have, in fact, read Engaging India : it sits prominently in my vast collection of books on the US history, diplomacy and international relations. I have studied this stuff for decades because thatâ€™s what I need to succeed in competing against them. My final result is as objective as it can be : it is measured in the money I have extracted from them by outwitting them. Business is just another form of war and Iâ€™ve got enough battle scars from the Americans to really learn how to beat them. Unfortunately, the naive Indian negotiators donâ€™t know any of that. They have no clue about economic warfare – a game that Americans have been playing forever and become extremely sophisticated in.

Differentiate the actions from the hyperbole. See what laws they want you to be bound to. See what conditions they are imposing upon you. Understand why. Measure which side gets how much in terms of money and power. The deal gives too much power to the Americans and takes away too much from India – for a payoff thatâ€™s just not good enough. The reality is that the leverage over Indiaâ€™s energy industry is the most potent weapon Americans have created to control India. And, they can keep a smiling face by employing plausible deniability : just a few well-chosen leaks about the contemplation of cutting off uranium supply to India in the financial press will be enough to send the Indian stock market tumbling and the FDI to dry up. Why are Indians being so stupid as to hand over the detonator of an economic nuclear bomb to the Americans?

Many years ago, Teddy Roosevelt said that he believed in â€œspeaking softly and carrying a big stickâ€. Thatâ€™s why I am trained to look for the big stick behind the smiling faces and soft speaking. India will do well to learn that lesson too.

Gujjubhai

Just noticed that you formatted my previous comment : thank you, much appreciated. The first paragraph block quote is a bit out of whack but otherwise itâ€™s a much easier read.

B.O.K, those are your answers to Gujjubhai’s excellent take on the other side of the equation? Gujjubhai clearly answered your question as to how US will block India’s deal with other NSG countries. And you have nothing to say but platitudes? Who do you think started NPT and NSG and why? There was only one target for NPT.

It’s nice to see you have so much confidence in Manmohan. If he was such an ace diplomat and a chalaki, he would have tackled his communists minions long time ago.

The only thing Gujjubhai is probably overlooking is the state of India a decade or two decades from now. I think India will have a lot more strategic leverage, bigger economy, and more involved in the world, say, when compared to now or was in 1975, to break down any US road blocks. The old post-parliament attack operation parakram-linked sanctions weapon will not work on India for too long. And India and US will be lot more intertwined in the future. US clearly could not give a better deal to India than China because, for historic reason, mostly due to India’s making, China is a recognized as nuclear power (built primarily by US) and we are not. But still there is good but brief article in IE (on Friday, I think) about how India’s deal is in someways better than China’s nuclear deal with US.

It’s not about colonial phobia – I think by and large the country is over it, except may be the communists – who actually liked colonialism and opposed freedom. You should seriously consider reading the “confessions of a hit man” book that Gujjubhai recommends – it gives the differences between rhetoric that US and it’s media feeds the world about itself – that fair-playing, enlightened country that everyone seems to lap it up easily, and the policies and coercions of the US establishment to get it’s way. Gujjubhai’s business example is right on target – but should one expect anything less?

Nitin

Gujjubhai,

The passion shows, whatever you might believe. That’s fine. But your arguments would be far more credible if you justified them with arguments other than impressing us with your experience and reading, and asking us to accept these as bases for accepting your conclusions. So let’s not have any more of this “act like an adult”, “educate yourself” type of statements thrown about.

(The rules of business and the rules of international relations are different. So the lessons from the world of business don’t directly translate to the ‘rules’ of international relations. The international system is an anarchy, and might is right. The corporate world operates under several layers of national and international laws and regulations. It’s a profound difference.)

This blog is of a Realist persuasion. So I agreed with the content (not the tone) of your injunction:

They have zero moral compunction in the naked pursuit of their national interest. Donâ€™t think for a moment that they will shy away from exerting power over India when needed.

Can’t agree with you more. I’ll just say that two can play this game. Indeed, that’s the entire point of all this—only small powers argue about “rights” and “sovereignty”. Great powers don’t bother about these niceties.

So when I see you paranoid (as you admit yourself) due to awe, I think you miss the point. Perhaps you find it hard to believe that India can actually negotiate with the greatest power on earth today. Yet, as you say yourself, in the context of your business experience, you’ve figured out their ways and can now pay them in their own coin. Unless you think that no one else can be as smart or smarter than you (a statistical impossibility) then what makes you think that the Indian foreign policy establishment hasn’t figured this out?

Another Gujjubhai once said that “be the change you wish to see”. While the growth of Indian power is palpable to others, the final frontier is in our minds. If we don’t believe we are a major power, strong enough to look after our interests, then we will never be one.

In the Realist interpretation, there are no rules binding nations. There is only power. The weak spend a lot of time arguing for a ‘rules-bound’ international community. The powerful do what they want, whatever they can get away with.

Gujjubhai

Aap purush nahi hain.. mahapurush hain!

Tell us more about these mysterious â€œAmericansâ€ of yours. How do they look? What do they eat? What do they wear? What language do they speak? I have never even seen one, leave alone negotiate with such mysterious creatures.

Ah, the good old ad hominem attack on me personally with a childlike attempt at indulging in personal ridicule instead of my point-by-point rebuttal of everything that you had said: well done, BOK. Now please do grow up and debate it like an adult, willya? I wonder what it was that set you off, my friend. Was it my quoting of the literal text of the Hyde Act contradicting your ideas? Was it the analysis I presented of the OPEC vs NSG? Was is the demolition of your argument about interdependence by calculating the potential financial impact as an approximation of the degree of dependence?

Seriously, I am here to engage in an intelligent debate because I deeply care about the future of India. Unlike you, I am not reducing this to taking cheap potshots. Now if only you could rise above personal attacks on me and Shourie etc and present some analysis backed by facts then I would love to hear it. I do believe that you are a patriot just as I am. But real debate must be on the basis of ideas, facts and analysis : all I have done is let the facts speak for themselves.

I have nothing against you personally, I am sure you are nice intelligent person. All I have done is point out that your arguments are not supported by facts, as written in the 123 agreement or the Hyde Act. If you are serious about debating this issue, then show me where I am wrong.

1.You said that India could develop alternate sources of uranium like Russia and France. I showed you that US policy, as defined in the Hyde Act, is to further restrict Indiaâ€™s trade with the NSG members. I further showed you by applying lessons from the world oil market why it is unlikely that India can do it on economic grounds.

2.You claim that India has a right to test. I agreed with the theoretical right to test, but showed you that, in practice, the power to exercise that right is severely limited by the 123 agreement if the US threatens to jeopardize a significant part of Indiaâ€™s electricity generation.

3.You claim that India can free up its domestic production of uranium for the nuclear program. I showed you that the US policy, as clearly spelt out in the Hyde Act, is to prevent that. The Congress has put annual certification mechanisms in place to ensure this. It will require a full material balance and accounting of not only imported uranium but also uranium mined in India. So that is unlikely to happen.

So, please do tell, where the flaws in my facts or logic are. If you just want to stoop down to personal attacks or paint me as the kind of person whoâ€™d subject you to socialism, all I can do is treat that with amusement at a childlike tantrum. I can assure you that I am a fearless participant in the international jungle of business and I am only applying the lessons Iâ€™ve learnt in my career. Rather than speculating on what kind of a person I am why donâ€™t you figure out rationally what is likely to happen? Even your idea of my arguments being self-fulfilling prophesies are silly : I am not an American and my thinking is not likely to affect how they act one way or the other. All I am trying to do is rationally figure out where the incentives for their future behaviors are. Sure, I may be wrong and they may all be as nice as Mahatma Gandhi, and everything will be well – India will get its fuel, grow its economy, build a nuclear arsenal and have independence in pursuing policy as well. Or may be the incentives Americans are trying to put in place are designed to enable them to exercise power to control what India can do in future. What will a rational actor do? You decide.

Gujjubhai

BOK,

Actually, on second thoughts, I am confused about why you are talking about my fear-mongering about Americansâ€™ potentially cheating India. Whereâ€™s the question of any cheating? The Americans have been absolutely up-front about their intentions : itâ€™s spelt out right there in the 1954 Atomic Energy Act, Hyde Act and the 123 Agreement. All I am saying is that Americans are going to be true to their stated policies, enacted laws and clearly enunciated intentions. Are you suggesting that Americans are making laws that, you have somehow divined, will not be applied to India? Is the US Congress just doing timepass and making laws that it is not going to hold the executive branch accountable to?

B.O.K.

Gujjubhai,

Saying that NSG *will* put restrictions is not an argument, it is speculation. This has not yet happened. Negotiations are still going on.

I will say one more thing that might comfort you. We all know that Russia is already helping us with a couple of our civilian reactors. How? Well, because Russia argued that it made those commitments to India before joining NSG and hence they have to be fulfilled.

If NSG gives India a clean waiver (and I agree that it is going to be a big challenge) and India signs deals with supplier countries.. and lets say 5 years later India tests (for whatever reasons).. then supplier countries would have a legal fig leaf to hide behind while continuing cooperation with us. Yes, countries like Australia and Japan would follow the US lead blindly.. but countries like Russia and France are highly unlikely to be submissive. What incentive does Russia have to follow USA’s domestic laws? None.

Gujjubhai’s argument is that USA has domestic laws. Well, so what? USA might as well have a law that says “Screw India”, that does not mean that it will be able to.. or that it will even try. And if it tries, would we just lie down and wait for it to screw us? (Shayam Saran’s words, not mine, from his interview with Karan Thapar)

Another arguments is that US will somehow prevent Indian fuel from being used in our weapons programme. This is the funniest thing ever. How? No answer.. except saying that they are devious and cunning and blah. Ask yourself, how is it possible *to* stop Indian fuel from reaching *un-safeguarded* Indian reactors on Indian soil? It is not.

Finally, the right to test is always a theoretical right. In practice, when it becomes imperative to test, then a country will just go ahead and test regardless of what international commitments it has made to the contrary. India hasn’t even made such a commitments.

Also, under the international law, sub-critical tests are not included in the definition of “nuclear test”. Now there’s a hint for those who can understand it.

Chandra,

I accept that one of my comments was personal and directed against Gujjubhai. It was entirely intentional. He started with calling Nitin a traitor and whatnot (see his very first comment at No. 21) and calling Manmohan Singh the same (Mir Jaffer reborn, Moron Singh). That comment had nothing substantive except pointing to a couple of articles. If that comment does not invite censure from you, while my comment does.. then I am just amazed.

Regardless of this, if Gujjubhai is willing to withdraw his comment and apologize to Nitin then I would request Nitin to remove my comment as well.

Last point.. merely leaving a link to some article and asking others to refute it is not debate. It is an escape tactic. I can also post links to several articles by non-political people that support the deal.. and say “I rest my case”. But it would be bullshit. And I called Gujjubhai out on that.

All his arguments have one basic premise.. *they* are smart, cunning, devious etc.. while we are not. I reject this basic premise completely.

Now, I rest my case.

Nitin,

Apologies for dragging this on even after your previous comment.

Nitin

B.O.K,

It turns out that the among the most strident opponents of India extracting uranium reserves at home are, well, the Leftists. Here’s a post from Dec 2005 on the subject. And I’d like to know the sources of funding of the various NGOs raising storm over uranium mining.

Ananth

On being prompted by Nitin, I read his comment and the reactions. A very fierce, passionate debate and both sides mean well for the country, I think. Somehow, the characterisation of those who welcome the deal as being self-confident and forward-looking and those who oppose it as being weak and lacking in confidence on Indians is not wholly accurate.

Nitin cleverly turns one point made by “Gujjubhai” on him back by saying that if he figured out how to deal with them, why not the rest of the Indians? On the surface, it is a fair point.

the reality seems to be that such people seem to be relatively rare amongst those who actually do the negotiating on behalf of the Indian government and second, even if they are there, they seem to be subject to other non-transparent considerations of the political establishment such that their voices are muted.

It is one thing to say that yes, let the Americans have their laws and if they to invoke them against us at a later date, we would find a way out but it is entirely another thing to try and figure out how one could have gotten a better deal without having to go through the stress and uncertainty that would surely arise if the provisions of the Hyde Act are invoked.

When the other side appeared desperate for a deal (April – June 2007) with press statements every day, I think there was ample opportunity to have deployed brinkmanship and wait for other guy to blink. We did not, it appears and of course, one can always hope that we would learn, for the next round. But that does not make it wrong for some one to criticise the outcome and the quality of the current negotiations.

On one thing “Gujjubhai” seems to be correct is that the provisions of the Hyde Act as applicable to India do actively seek to prevent the US government from trying to help India secure alternative supplies.

The 123 agreement says otherwise but it is finally subject to the overriding provisions of the Hyde Act. The letter of the 123 Agreement is clear on that.

In the final analysis, a lot is left to the continued goodwill and benevolence of successive American administrations towards India.

At the same time, it is hard, personally for me at least, to dismiss the arguments of those who say that other governments do not leave things to such variables and get them in B&W in writing for it is the written word that survives and also the contention that this was an opportunity to extract more out of the Americans in terms of Indo-Pak. dynamics, arm sales, cross-border terrorism, etc.

Notwithstanding the previous paragraph, if that is a strategic bet/calculation that Dr. Singh has taken, he is entitled to do so. That is what is leadership is all about. Equally, the nation is entitled to ask him the benefits that India would get by doing so, the potential costs of doing so and how, in his judgement, the former outweighs the latter.

(Nitin: you might wish to write to Dr. Sagar and seek his permission to post his email that I had circulated to my mailing list on this as a comment. He says that the issue is not one of testing at all. He says that he believes that India has the capability to do a successful computer simulation. He says it is about the availability of sufficient fissile material, intrusive annual inspections, classification of old reactors as military and all new ones as civilian, the economics of using Uranium when its cost has shot up already through the sky and the safety of using enriched uranium when all other technologies are available, etc. I think all these points too are relevant besides the issue of American strategic interest (or otherwise) towards India).

Nitin

Dr M Vidyasagar’s take on the matter (and not a direct response to this post); received by email and posted with permission:

The headline (“A good deal but very bad politics”) can apply equally well
not just to the nuclear deal, but also to the manner in which the UPA
government has gone about negotiating it.

Surely it was up to the Foreign Secretary (Shivashankar Menon), the
External Affairs Ministry (Pranab Mukherjee) and the PM himself to have
made all of these comments during the various phases of the negotiations!
Instead the government has gone about its negotiations with the following
three salient features.

1. Their attitude has been: “The deal is done — if you don’t like it you
can lump it.” This has been their attitude not just to the public at
large, but also to opposition parties, and even the Indian nuclear
scientists.

2. They have planted stories and editorials in various newspapers, the
Indian Express being the most obvious prostitute and up for sale to the
highest bidder, essentially rubbishing the Indian nuclear scientific
establishment and its contributions to date.

3. They have encouraged the peddlers of the outdated, obsolete, and
dangerous American nuclear technology to fantasize about sales of up to $
100 BILLION (yes, you read that right) worth of nuclear “technology” to
meet India’s energy needs. This is of course consistent with Item 2
above.

My own reaction to the deal has been as follows.

A. THE MANNER IN WHICH THE DEAL HAS BEEN NEGOTIATED

I have not wasted my brain cells reading every full stop and comma of the
deal. What is the point? Whether the deal is good or bad, this
government is determined to shove it down our throats. I would have spent
some time thinking about and analyzing the deal if the government had
shown any flexibility, but it has been determined not to give an inch.

Aside from the incongruity of this attitude in a democratic society, the
UPA government has also left itself open to being outmaneuvered a second
time on the 123 arrangement, just as happened earlier with the Hyde Act.
In the case of the original nuclear agreement announced with President
Bush visited here, the US establishment played its “good cop, bad cop”
role to perfection, with the Presidency stating that it is helpless and
that treaties are actually approved by the Congress, and then pushed
through the Hyde Act which differed very substantially from the original
announcement. In contrast, our own government was held hostage to the
*principle* of signing a deal with the USA, rather than to the *specifics*
of the deal. This is why, even as the goalposts kept shifting, the UPA
government was never in a position to say “Enough is enough — THIS is not
the deal to which we agreed!” Let us not forget that even the so-called
123 agreement is still not US law, and is subject to the very same “bait
and switch” tactics as were employed with the original Bush-Singh
“agreement.”

In India we do not have “separation of powers” in the American way, so the
“good cop, bad cop” routine is harder to pull off in India. The
Parliament can hardly renege on approving a deal that the government of
the day has negotiated, as is possible in the USA. If the UPA government
had any brains (which is of course like saying “If the Congressmen had any
backbone”), they could have had their own “bad cops” in the form of all
the entities in civil society that are beyond their control, such as the
opposition, “public opinion” etc. and said “Just as you (US President)
have been forced to deviate from what you promised, so have we!” But of
course, fantasizing about such things will never get us anywhere.
Remember the Shimla Agreement, when Indira Gandhi let slip the opportunity
to settle the Kashmir border issue once and for all. We are always more
considerate of the other side’s feelings than we are for our own
countrymen!

B. THE AFTERMATH

I myself am less exercised about the test ban than I am about the flow of
dangerous American nuclear technology into India. We can live with a cap
on our fissile material, unless this stupid government goes and negotiates
a cap on the delivery mechanisms (meaning missiles) — something that they
are capable of doing! But I get REALLY worried when I read that companies
such as GE etc. are licking their chops in anticipation of mega orders
from India for their nuclear reactors.

Let me remind you that there are only two countries in the world that use
ENRICHED uranium — the USA and Russia. It is not entirely a coincidence
that these are also the same two countries to have had serious nuclear
accidents. In contrast, practically every other country (France, Canada,
Germany, …) use NATURAL uranium. Our own technology, originally
imported from Canada but now thoroughly indigenized, uses natural uranium
too.

Ever since 1974, the Indian nuclear scientists have been evolving ever
more clever ways to get around the ban on the supply of nuclear fuel. The
development of fuel rods for the RAPP and TAPP based on Thorium, and the
developments in fast breeder technology at Kalpakkam, are two examples.
In contrast, the American companies have not supplied any nuclear power
after the Three Mile Island disaster in the 1970s, and of course have not
invested one penny in improving their nuclear technology. Is THIS the
technology on which we want to base our nuclear power plants?

In order to have a steady supply of nuclear power, two things are needed:
nuclear technology, and INVESTMENT in nuclear power plants. Successive
Indian governments have neglected the latter, but found it expedient to
blame the energy shortfall on the alleged inadequacies of the former.
Even now, whatever be the shortcomings of the treaty, if the government
uses the positive negotiations with the Nuclear Suppliers Group (something
that is by no means guaranteed, by the way) to invest in the upgradation
and enhancement of OUR own nuclear technology, some good can still can
come out of all this. But if the deal only opens the door for middlemen
and corrupt “power brokers” (pun intended) to dump obsolete and dangerous
American nuclear technology on a defenceless Indian public, then all of
our lives are at risk — and not just metaphorically but quite literally.

Nitin

Note: Several comments by Gujjubhai have inexplicably disappeared. I suspect the anti-spam measures have been at work. Apologies.

We’ll try to retrieve those comments—from downloaded comments in the feedreader.

Apologies to Gujjubhai & others.

Update 1 :Traced the cause. It was one of the anti-spam plugins. I’ve found all the missing comments in my feedreader, so I’ll put them all back over the next couple of days.

Update 2 I’ve put back those missing comments that I managed to find. If I’ve missed out any please email them to me.

Perhaps the best debate in the Indian blogosphere on this issue, especially if you skip the part where the people question each other’s patriotism. I have no knowledge and hence no intention of participating.

Can we be sure though that the hue and cry we are going thru right now, is not a staged “bad cop” routine?

1. How is that US was able to stop Narasimha Rao from going ahead with a nuclear test? Didn’t India spend atleast 3 years in the doghouse for the nuclear tests of 1998? What has changed between then and now? Did you really fall for the ‘India Shining’ thing?

2. How is that even before signing the deal, we have screwed the Indo-Iran gas pipeline (energy security, anyone!), voted against Iran at IAEA and are going to conduct naval exercises with US and other banana states only as a show of strength against China?

3. As some people have claimed above, if India can ignore American fuel and go elsewhere in the event of a stand off in the future, why could it not get more Cryogenics from Russia, why it could not prevent the Tarapore fiasco and even now why are we first going to US for a deal and then to NSG, IAEA, France, Russia, whatever?

I feel Indians are the victims of their own “we have arrived” propaganda. India may one day pay a heavy price for this over-confidence. And please don’t make your opinions after reading the Indian English Media!

Having said all this, I do support the deal. But I feel Manmohan Singh has been naive not to get enough protection against the Hyde Act.

Nitin

Dear Balaji,

What you point out happened even without the deal; and the appropriate question is to ask ‘what’s to prevent that from happening even without the deal?’.

hmm… I seem to disagree on the pipeline. In my opinion our energy security should be based on the following premises,

1. By the year X, India should meet all its fossil fuel needs from within the subcontinent or from our immediate neighborhood. Pipelines from Iran, Turkmenistan, Burma and Bangladesh help us not only to tap those resources but also improve relations with our neighbors. If we are not sourcing from them, then others especially the Chinese are going to. Its a waste, if you ask me.

2. By some year Y, India should meet significant portion of its energy needs from non-fossil fuels. This nuclear pact serves that purpose. But greater emphasis is needed on ethanol, wind and even on hydel projects.

3. The strategic concerns like the ‘neck at the supplier’s hand’ can be met when India becomes a major Petro hub. (we are already moving towards this). When we get raw fuel anyway for processing, it gives the cushion to starve any crisis that comes from disruption of pipeline supply/price bullying. i.e. Pipelines need not signal the rusting of our Petro ports. And ofcourse we shud have significant strategic reserves.